LONDON (Reuters) - British electricity generator Drax Power has paid a 28 million pound penalty for failing to meet obligations to fund energy-saving measures such as loft and cavity wall insulation for households in low-income areas.
Under the Community Energy Saving Programme, power generators as well as suppliers were required to deliver energy-saving measures to households by the end of December 2012.
"Drax missed its target by a clear margin, disadvantaging several thousand households in some of the most deprived areas in Britain," energy regulator Ofgem said on Friday.
"Not only are these consumers missing out on energy efficiency measures that would help keep their homes warm, they also face higher energy bills as a result."
Ofgem said it had also received 11 million pounds from Intergen, which is jointly owned by the Ontario Teachers' Pension Plan and China Huaneng Group, for failing to meet its targets.
Drax Power delivered just 37 percent of its carbon emissions reduction target under the scheme, the regulator said. The North Yorkshire-based company runs Britain's largest coal-fired power station.
Drax said it had from the outset voiced concerns about including independent power generation firms in the scheme, because they lack experience in the delivery of energy efficiency measures and have no direct relationship with domestic consumers.
It therefore had little option but to use a third-party provider, which failed to meet the target, the company said.
Drax Chief Executive Dorothy Thompson said Drax had sought to comply with the scheme, despite considering its design was flawed.
"We are deeply disappointed with the magnitude of the fine," she said.
"However, we believe it is in our shareholders' interests to settle this matter and, as the nation's single largest power provider, focus on delivering a reliable supply of electricity this winter."
(Reporting by Paul Sandle; editing by Jane Baird)