9th May 2025 07:00
PRESS RELEASE
0700 FRIDAY 9 MAY 2025
Ofgem secures customer compensation from ten suppliers for technical overcharging error
Ten suppliers have paid more than 34,000 customers a total of £7 million in compensation and refunds after overcharging some customers in error, following a compliance review by Ofgem.
This issue specifically impacted customers with 'Restricted Meter Infrastructure' between January 2019 and September 2024, which means they have more than one electricity meter point at their property recording energy usage.
Energy suppliers are allowed to apply multiple standing charges for homes with multiple electricity meters. However, this meant that some customers were erroneously charged more than is allowed under the price cap when combined with unit rates.
The regulator expects suppliers to be vigilant and ensure customers are not charged more than the price cap, which sets a limit on how much suppliers can charge for energy. This includes ensuring the application of multiple standing charges does not lead to price cap overcharging.
After identifying the issue and investigating, the suppliers swiftly rectified the issue and agreed to pay a total of £7million in refunds and compensation to those affected. This includes £5.6million in refunds and almost £1.4million in goodwill payments.
Charlotte Friel, director of retail pricing and systems at Ofgem, said:
"Our duty is to protect energy consumers, and we set the price cap for that very reason so customers don't pay a higher amount for their energy than they should.
"We expect all suppliers to have robust processes in place so they can bill their customers accurately. While it's clear that on this occasion errors were made, thankfully, the issues were promptly resolved, and customers are being refunded.
"Today's outcome serves as a reminder to all energy suppliers that they must implement the price cap properly and do their due diligence. It also shows that, where appropriate, Ofgem is prepared to work with suppliers that fail to comply with our rules."
All ten suppliers have updated their systems and processes to prevent the error occurring in future. Ofgem will continue to engage with suppliers to ensure that the payment packages are progressed in full, and will continue to closely monitor all suppliers to ensure they implement the price cap properly, and protect their consumers from paying too much for their energy.
ENDS
Notes to editor
· The supplier payment breakdown can be found here:
Supplier | No. of customers | Total Refunds | Total Goodwill |
E.ON Next | 160 | £45,195.82 | £9,330.33 |
Ecotricity | 166 | £36,633.12 | £18,904.35 |
EDF Energy | 3 | £112.29 | £30.00 |
Octopus Energy | 20,862 | £2,636,884.00 | £546,278.00 |
Outfox The Market | 570 | £6,106.06 | £4,590.00 |
OVO Energy | 2,372 | £602,066.05 | £280,068.73 |
Rebel Energy | 15 | £2,339.49 | £575.00 |
So Energy | 1,558 | £266,041.16 | £58,285.85 |
Tru Energy | 70 | £7,486.54 | £11,663.00 |
Utility Warehouse | 8,272 | £2,043,098.84 | £453,960.00 |
Total | 34,048 | £5,645,963.37 | £1,383,685.26 |
· Ofgem has published a compliance note with further details https://www.ofgem.gov.uk/decision/supplier-compliance-price-cap-requirements-customers-restricted-meters
· Customers will be refunded automatically, if they have not been already, and do not need to do anything. If a customer has since changed supplier, they will be contacted by their previous supplier in due course to arrange a refund.
· Standard Licence Condition ("SLC") 28AD.1 requires suppliers to ensure that the charges applicable to each relevant customer do not exceed the price cap. This includes customers with 'Restricted Meter Infrastructure'.
· The energy price cap was introduced by the government and has been in place since January 2019, and Ofgem is required to regularly review the level at which it is set. It ensures that an energy supplier can recoup its efficient costs while making sure customers do not pay a higher amount for their energy than they should. The price cap, as set out in law, does this by setting a maximum that suppliers can charge per unit of energy.
· While the error is a serious matter, the regulator recognises that the suppliers acted quickly to resolve the issue and started the refund process promptly. The commendable extent of their engagement through the compliance process has been considered when agreeing the level of goodwill paid.
· In the case of Rebel Energy, which is no longer trading, Ofgem has confirmed that all customer refunds and compensation have been issued.