AN ENERGY firm is facing a £23.6 million fine after regulators spotted it overcharging in pursuit of extra profits.

Regulator Ofgem said gas and electricity supplies to the National Grid had to match demand at any given time.

Energy producers are sometimes told by the National Grid to cut output at times of lower demand. The producers then receive compensation for any lost profits, the cost of which is passed on to consumers.

Ofgem said that EP SHB, the Czech-owned company that runs South Humber Bank gas-fired power station, had claimed compensation at “excessive” levels.

Ofgem director of enforcement Cathryn Scott said: “Protecting consumers is a priority for Ofgem and we will continue to monitor the wholesale energy markets in Great Britain and ensure their integrity on behalf of energy users.

“This latest enforcement action sends another strong signal to all generators that they must put in place controls to ensure that their bid prices are set in a way that ensures that they do not obtain excessive benefits during transmission constraint periods.

“If they fail to do so, licensees should expect to face large penalties, particularly in light of the repeated warnings which have been given regarding our expectations of generators.”

End Fuel Poverty Coalition co-ordinator Simon Francis said: “It is welcome that Ofgem has taken remedial action to punish the behaviour of firms who have helped contribute to record high energy prices.

“However, it would have been preferable if this behaviour had been identified earlier and a stop put to it before it ended up costing people money.

“It’s another sign of Britain’s broken energy system, which is in desperate need of reform.”