Ofgem has fined SSE £2.06m over wholesale market inside information breaches.
The fine relates to disclosure around a Black Start contract with National Grid. SSE signed non-binding terms with the transmission system operator on 22 March 2016 to provide grid restart services from any of three units at Fiddler’s Ferry from 1 April that year. Previously it had announced the units were to close from that date.
Ofgem said that given Fiddler’s Ferry had a capacity equivalent to 3 per cent of peak demand, its closure or otherwise would affect wholesale prices.
The regulator stated SSE’s non-binding agreement and decision to retain the rights to use the transmission system made the same day “reversed the likelihood that the three units would close. Consequently, the agreement was likely to have a significant effect on wholesale prices, and was therefore inside information”.
SSE did not publish that information until 30 March 2016 when it had finalised the contract. Ofgem said that resulted in four days trading where the market did not know there would be more generation available than previously thought, which is likely to have led some people paying more for power than they should have paid.
Ofgem said its investigation found SSE did not act in bad faith. It said the new market rules (REMIT) were relatively new obligations at the time and guidance was limited. It originally fined SSE £2.6m, but discounted it by 30 per cent as the supplier admitted the breach and settled early.
However, it said future fines for REMIT breaches would be higher.
“SSE takes its market disclosures extremely seriously and acted in good faith, publishing details of the ‘Black Start’ contract for Fiddlers Ferry power station once signed, in line with our interpretation of the REMIT regulations at the time.
“We subsequently understood that Ofgem’s interpretation required disclosure to the market at an earlier stage. We admit that our approach was not in line with this requirement.
“SSE did not benefit from disclosing only once the contract was signed and remains committed to clear and transparent rules for all market participants. We will be pressing regulatory authorities for additional guidance for market participants going forward.”