Energy regulator Ofgem has fined npower, one of Britain's 'big six' power companies, 2 million pounds for improperly handling customer complaints.
Ofgem said npower -- owned by German utility RWE -- was in breach of regulations which set standards for the way energy companies handle customer complaints.
Complaint handling regulations, which took effect from October 2008, set out the service that domestic and micro-business energy customers should expect from energy companies if they raise a complaint.
Npower is the second of the so-called big six power providers to be fined after Centrica's British Gas -- the biggest household energy supplier -- was docked over similar breaches. A third, EDF Energy, is being investigated.
The three remaining big power providers are SSE, Spanish group Iberdrola's Scottish Power and E.ON UK, which recently sold its British power networks to U.S. power firm PPL.
Consumers have a right to expect that energy companies will comply with the standards, Ofgem's senior partner for sustainable development Sarah Harrison said. Npower failed to do so and although it took remedial action, it has incurred a penalty for failing consumers.
Ofgem said an investigation found npower did not provide customers with unresolved complaints key details about services offered by the energy ombudsman and that it did not have adequate policies in place to deal with complaints.
The regulator, however, said npower had now addressed and remedied all breaches of the regulations.
Adam Scorer, Director of External Affairs at Consumer Focus, Britain's statutory consumer lobby group, said: Customers need to be confident that suppliers will deal with their complaint quickly and fairly and that there will be consequences when they do not play fair.
Monday's news follows widespread concerns over rising gas and electricity prices. Economists have said a 20 percent rise in energy bills could push consumer inflation to a three-year high.
Earlier this month, energy secretary Chris Huhne said British households struggling to pay rising fuel bills should change supplier, check their tariffs, or insulate their homes to try to save money, after ministers met the 'Big Six' energy companies for talks.
(Reporting by Adveith Nair; Editing by Rhys Jones and Helen Massy-Beresford)