"ScottishPower 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," Ofgem Chief Executive Dermot Nolan said.

"This created frustration and worry for many customers, who also wasted a lot of time trying to contact the supplier by phone."

ScottishPower, one of Britain's "big six" energy suppliers, said that the IT upgrade led to increased customer complaints.

"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," said Neil Clitheroe, CEO of Energy Retail and Generation at ScottishPower, in an emailed statement.

The regulator said that about 15 million pounds will be paid to the Iberdrola-owned (>> Iberdrola SA) ScottishPower's customers who were affected by service issues and the remainder will go to charity.

The Ofgem launched in November 2014 an investigation into ScottishPower's services, including long call-waiting times and a delay in implementing decisions by an independent official, giving the energy supplier monthly deadlines to improve.

In December, Ofgem fined Npower, a subsidiary of Germany's RWE (>> RWE AG), 26 million pounds for overcharging customers and improperly handling customer complaints.

(Reporting by Rahul B and Mamidipudi Soumithri in Bengaluru; Editing by Biju Dwarakanath)

Stocks treated in this article : Iberdrola SA, RWE AG