July 14

Ofgem considering Final Order on UK Energy Incubator Hub following company failings


Ofgem has issued a Notice of Proposal to make a Final Order on UK Energy Incubator Hub Ltd following the company’s persistent compliance failings. 

If issued, this would be the first time the regulator has proposed to use the rulings since they were first introduced in December last year. Under the jurisdiction of Final Order, Ofgem can mandate that the company, in this case, UK Energy Incubator Hub, remove a senior from a position of managerial responsibility. 

For now, the order is being considered by the Enforcement Decision Panel and following a 21-day consultation period, the panel will consider whether the order should be issued or not.

The penalties of non-compliance

UK Energy Incubator Hub is a fairly large firm that once operated under two brands – Northumbria Energy and Neo Energy – and serves over 3000 customers. It previously operated under the name Euston Energy. 

Unfortunately, this is not the company’s first instance of compliance penalty, having been penalised three times due to compliance failings. The energy supplier received three separate Provisional Orders due to their failure to adhere to compliance rules, including one in June this year, where they were banned from taking on new customers due to poor customer service. 

In addition to its compliance failings, the energy company could not provide basic information on their operations to Ofgem when the regulator questioned them on their poor service standards. 

Given that the company was issued legal orders with little visible improvement in its standards, it is perhaps inevitable that Ofgem would consider harsher penalties. 

Uk Energy Incubator is not the only energy supplier to receive an Order from Ofgem. The energy regulator issued a warning to supplier Foxglove Energy Supply due to its failure to meet the Financial Responsibility Principle, forcing the company to take swift action to fix its financial position or face severe consequences.

The importance of compliance

The recent Orders issued to the energy supplier highlight the importance of meeting compliance requirements. Ofgem has passed tough new regulatory measures to monitor energy suppliers and penalise them should they not meet standards. 

Energy producers have to ensure that their internal operations follow regulatory requirements, which include, but are not limited to, high-quality customer service and solid financials, lest they face severe penalties.  


Energy Industry, Energy Industry Risk, Industry Update

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