Ofgem lifts Outfox the Market Feed in Tariff provisional order

energy tariff information

Outfox the Market has lived up to its name and outfoxed the threat of a serious sanction from Ofgem, the UK energy market regulator, regarding overdue Feed in tariff payments. Read on as Selectra gives you the low-down.

Why did Outfox the Market attract Ofgem’s attention?

Ofgem, the independent energy regulator for Great Britain, had warned Outfox the Market to pay £602,930 by Wednesday the 12th of February or it would be issued with a provisional order.

The payment was to be made to the Feed-in Tariffs (FIT) scheme, an initiative introduced in 2010 by the Labour government to encourage a cottage industry of small-scale renewable and low-carbon energy producers.

While the Conservative government made a decision to end the FIT scheme in 2018, its closure does not yet affect the requirement that suppliers continue to pay into it.

All licensed electricity suppliers active in the UK in a given period are still required to take part in what Ofgem calls the FIT “levelisation process”.

This is a way of spreading the cost of the FIT scheme across all licensed electricity suppliers. Each company pays in proportion to the amount of electricity they have recently supplied in Great Britain. Although any FIT payments they have already made to generators is taken into account.

How did Ofgem put Outfox the Market on notice over its Feed-in-Tariff payment?

looking closely

Ofgem came out on the 11th of February to publicly state that Foxglove Energy Supply Ltd, the owner of Outfox the Market, had said it would be unable to meet its payment obligations by the next-day deadline.

The energy regulator warned the Leicester-based supplier that if it did not make its levelisation payment on time it would be in breach of its electricity supply licence and declared it was making a provisional order against the supplier.

Ofgem said that, not only was Outfox the Market risking a formal investigation being opened into its failure to comply and could face paying a penalty, but that its license to supply could end up on the chopping block.

Provisional orders are the biggest weapon in Ofgem’s regulatory arsenal other than the nuclear option of final orders.

They are issued to deal with “apparent (or apparent likely)” breaches of a licence condition or other relevant rules.

Why was Outfox the Market warned before the FIT deadline?

Ofgem’s decision to issue the order is understandable given that Outfox the Market had previously missed payment deadlines.

It failed to make its levelisation payments on time for the second and fourth quarters in the previous FIT period between 2018 and 2019, so it looks like the regulator contacted it preemptively to check if it could meet the 12th of February deadline.

As Outfox the Market had informed the watchdog that it wouldn’t be in a position to make its FIT levelisation payment, the regulator issued its provisional order.

How did Outfox the Market react?

Outfox the Market posted a statement on Twitter the same day which said it was “extremely disappointed” that Ofgem had issued a public release about the company before the payment due date calling the action “presumptive and ultimately inaccurate.”

“There is absolutely no regulatory basis for Ofgem making this announcement publicly—potentially causing reputational damage to Outfox the Market for a payment that is not yet due,” the firm said in the statement.

“Outfox the Market has never missed any obligatory payments and are fully committed to satisfying all licencing conditions. Furthermore, the levelisation payment will be paid-in-full by the due date of 12th February 2020.”
Outfox the Market

How did Outfox the Market avoid Ofgem’s wrath?

Lo-and-behold, on the day of the deadline and just one day after the embarrassment of being publicly sanctioned by Ofgem, Outfox the Market paid up in full. The regulator then issued a revocation of the provisional order.

Whether there was a miscommunication between the company and the regulator about its ability to pay or whether Ofgem’s shaming Outfox the Market ahead of time worked and forced the supplier to pay up remains to be seen.

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