Scottish Power has been ordered to pay £18 million over the way it handled the introduction of a new computer system.
More than 300,000 customers received their bills late as a result of the new system, and Scottish Power failed to sufficiently deal with customers' calls and complaints, energy regulator Ofgem ruled.
Ofgem said Scottish Power had improved its customer service, but it did not stop the regulator from imposing its third biggest fine in history. Over the course of the 18 month investigation, Ofgem said Scottish Power had reduced call waiting times, cut the number of abandoned calls, the number of ombudsman complaints and the number of late bills by three-quarters.
Ofgem chief executive Dermot Nolan said: "Scottish Power let its customers down during the implementation of a new IT system. When things went wrong, it didn't act quickly enough to fix them. This created frustration and worry for many customers, who also wasted a lot of time trying to contact the supplier by phone.
"The £18m payment sends a strong message to all energy companies about the importance of treating consumers well at all times, including while new systems are put in place."
Neil Clitheroe, Scottish Power's head of energy retail and generation, said: "Scottish Power has worked with Ofgem throughout this investigation. We apologise unreservedly to those customers affected.
"In order to upgrade our old IT systems, we invested £200m on new technology to allow us to deliver smarter digital products and services to benefit our customers.
"During the complex transition between systems we encountered a range of technical issues. This led to an unacceptable increase in complaints and reduced the quality of our customer service.
"I gave a guarantee that no customer would be left out of pocket by these issues and we continue to compensate customers who have been affected."