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6 January 2011
Last updated at 04:45 ET
National Grid is facing a fine of £8m after failing to provide accurate information to the regulator.
Ofgem, the regulator, said the issue arose after a whistleblower brought misreporting on a gas mains replacement programme to the attention of National Grid.
The inaccurate information came in 2005 to 2008, Ofgem said.
National Grid had not benefited financially and any fall-out for consumers has been corrected.
Maintenance National Grid is paid to maintain the UK's gas and electricity network.
As part of this work, a 30-year widespread gas mains replacement programme began in 2002, as some pipes were up to 80 years old.
However, a whistleblower revealed that the data that National Grid needed to provide to Ofgem about the progress of this work was being misreported.
Essentially, financial claims were being made twice for the same work, and claims were being made for work in one year that was not actually completed until the following year.
Some 20% of consumers' gas bills go towards gas distribution charges. Of this, a smaller percentage goes towards the gas mains replacement programme.
When the misreporting was highlighted, National Grid ensured that the extra charges did not filter through to customers' bills.
"Ofgem's work to ensure consumers receive value for money for network investment and replacement relies heavily on receiving accurate reporting from companies. Ofgem's actions today reinforce our strong message to all energy companies that misreporting cannot and will not be tolerated," said Lord Mogg, chairman of Ofgem.
"National Grid has co-operated with our investigation, has accepted our proposed findings, and is taking action to seek to ensure this does not happen again. The penalty we are proposing to impose reflects this and would have been much higher otherwise."
The fine must go through a consultation process.
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Ofgem, the regulator, said the issue arose after a whistleblower brought misreporting on a gas mains replacement programme to the attention of National Grid.
The inaccurate information came in 2005 to 2008, Ofgem said.
National Grid had not benefited financially and any fall-out for consumers has been corrected.
Maintenance National Grid is paid to maintain the UK's gas and electricity network.
As part of this work, a 30-year widespread gas mains replacement programme began in 2002, as some pipes were up to 80 years old.
However, a whistleblower revealed that the data that National Grid needed to provide to Ofgem about the progress of this work was being misreported.
Essentially, financial claims were being made twice for the same work, and claims were being made for work in one year that was not actually completed until the following year.
Some 20% of consumers' gas bills go towards gas distribution charges. Of this, a smaller percentage goes towards the gas mains replacement programme.
When the misreporting was highlighted, National Grid ensured that the extra charges did not filter through to customers' bills.
"Ofgem's work to ensure consumers receive value for money for network investment and replacement relies heavily on receiving accurate reporting from companies. Ofgem's actions today reinforce our strong message to all energy companies that misreporting cannot and will not be tolerated," said Lord Mogg, chairman of Ofgem.
"National Grid has co-operated with our investigation, has accepted our proposed findings, and is taking action to seek to ensure this does not happen again. The penalty we are proposing to impose reflects this and would have been much higher otherwise."
The fine must go through a consultation process.
Online Business Consulting | Internet Business Consulting