Symbio Energy hit by £100k penalty, Ofgem says saga showed ‘serious weaknesses’ in Symbio’s financial management

Supplier Symbio Energy will be fined £100,000 for repeated late payments under the feed-in tariff and Renewables obligation schemes, Ofgem has announced.

The proposed penalty has been the subject of correspondence between the company and the regulator, not least because during the pandemic customer revenues were uncertain. But the regulator insisted that, “timely payments in respect of these obligations has an adverse effect on other suppliers who have met their obligations (and potentially their customers), offers an unfair advantage to the late payer, is a resource drain on the regulator and undermines the integrity of the environmental schemes.”

The regulator said that after considering the supplier’s representations, it “concludes that Symbio had not organised itself and its financial affairs so as to make payments on time.” It said that Symbio’s business model, with no share capital or available credit facilities in place, exposed it to suffering cashflow difficulties in circumstances when customers pay late. But, “Had Symbio taken action sooner to rise to these challenges, it may have been possible to pay on time as is demonstrated by the fact that it did end up finding the funds to pay.”

The regulator said Symbio could have taken action sooner so it could make the payments. The company  was aware that inaction would result in it breaching its obligations. “Therefore, while the Authority recognises that Symbio’s actions may not have been deliberate in the sense that it did not set out with an intention to contravene its obligations, its conscious decision making in very difficult circumstances, made with a clear understanding of the nature of its obligations, led directly to the breaches occurring.”

It added that “Symbio’s communications over whether it would be in a position to pay on time were repeatedly unclear and inconsistent” and the exchanges “revealed serious weaknesses in Symbio’s financial management or compliance procedures”.

The penalty relates to four separate contraventions by Symbio over a five month period. The total of late payments was £1,152,335.64 and each time was enough to contribute to the triggering of mutualisation mechanisms that imposed costs on other companies and their customers.

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