By Jonathan Davies
The Energy regulator Ofgem has issued its two fines totalling £39m, one of which is the largest it has ever issued.
Ofgem fined Yorkshire based firm Drax £28m, the largest ever issued, and InterGen £11m.
The fines come after both companies failed to meet targets to insulate homes under the Community Energy Saving Programme (CESP) as part of the government's Home Energy Saving Programme.
It was designed to improve energy efficiency in low income areas.
Dorothy Thompson, chief Executive of Drax, said: "We are deeply disappointed with the magnitude of the fine. 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.
"We are pleased to be working with National Energy Action to develop a package of measures which would benefit vulnerable energy consumers.
"We believe the design of the CESP was flawed and significant problems were encountered with scheme delivery, the CESP market and the complex arrangements."
Sarah Harrison, senior partner in charge of enforcement at Ofgem said: "Drax missed its target by a clear margin, disadvantaging several thousand households in some of the most deprived areas in Britain.
"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. Today's agreement to pay £28m reflects the seriousness of the consequences of these failings for consumers."
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