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Centrica's British Gas Pays GBP20 Million to Settle Prepayment Meter Probe

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Centrica's British Gas Pays GBP20 Million to Settle Prepayment Meter Probe

Centrica's (CNA.L) subsidiary British Gas agreed to pay 20 million pounds sterling into the voluntary redress fund of the UK's Office of Gas and Electricity Markets, or Ofgem, to settle the regulator's three-year probe into prepayment meter practices.

In a Friday release, the UK-based energy and services company said British Gas will provide redress and compensation to affected customers over the 2018 to 2021 period, in addition to the compensation already paid to those impacted in 2022 to 2023.

The settlement follows an investigation into British Gas that Ofgem initiated in February 2023 for allegedly breaching license conditions aimed at protecting vulnerable customers. The regulator concluded that the Centrica subsidiary "failed to meet the standards required of an energy supplier when installing prepayment meters."

"It is clear that British Gas fell short in its treatment of an unacceptable number of vulnerable customers who had a PPM installed without consent, and it's right that they've taken action to put things right," Ofgem Chief Executive Tim Jarvis said in a same-day release. "The installation of prepayment meters under warrant should only be a last resort, with rigorous checks to ensure debt is recovered lawfully, proportionately and safely."

As part of the agreed settlement package, British Gas will also write off of up to 70 million pounds in energy debt for customers in vulnerable situations. The remainder of a 22.4 million-pound voluntary support package that British Gas launched in 2023 will also still be provided by the company.

"When these issues came to light in 2023 - we apologised, stopped the activity immediately and took rapid action to improve our processes and change how we engage with customers in debt, particularly those in vulnerable situations," Centrica Group Chief Executive Officer Chris O'Shea said in a statement. "Over the last three years, we have treated this matter with the seriousness it deserves and have made changes to our practices and put safeguards in place to ensure we deliver the standards our customers have every right to expect."

Centrica noted that the settlement is not expected to have an impact on its 2026 financial guidance.

As of late Thursday morning, Centrica shares were trading 4% lower in London.

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