SSE is to make a £100,000 payment to Energy Action Scotland in recompense for receiving excessive constraint payments.
Ofgem said the penalty refers to a period in January 2014 when SSE submitted increased offers to National Grid to reduce generation at six of its Scottish hydroelectric power stations, due to a flood risk at the dams.
SSE maintained this level for longer than was necessary and as a result National Grid paid more than it should have done to reduce generation from the stations.