In a recent move to protect energy consumers, ten major energy firms in the UK, including EDF, E.ON, and Octopus, have been ordered to pay £7 million in compensation and refunds. This decision follows an investigation by the energy regulator Ofgem, which found that these suppliers overcharged more than 34,000 customers due to errors in the calculation of standing charges—daily fees that apply regardless of energy usage, as reported by The Guardian.
The Billing Error: A Wake-Up Call for Suppliers
The overcharging problem occurred between January 2019 and September 2024 and affected customers with multiple electricity meters. These consumers were mistakenly billed more than allowed under Ofgem’s price cap, which sets the maximum charge for each unit of energy consumed.
Charlotte Friel, the director of retail and pricing systems at Ofgem, commented on the issue, emphasising the regulator’s role in consumer protection: “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.”
Friel also underscored the expectations placed on energy suppliers, stressing the need for more robust billing systems: “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.”
Octopus Energy’s Apology and Explanation
Octopus Energy, one of the most affected suppliers, acknowledged the mistake, clarifying that the overcharging was tied to a rare meter type affecting only 0.3% of its customer base. A spokesperson for the company issued an apology, adding that while they were following one of Ofgem’s regulations, they inadvertently violated another. “Mistakes happen, and we’re sorry when they do,” the spokesperson said. “We were following one piece of Ofgem regulation but in doing so accidentally infringed another. We are glad to have now made it right for them.”
This rare incident highlights the complex nature of energy billing, especially when multiple meters are involved. It also raises important questions about how well energy suppliers monitor their billing processes to prevent such errors.
A Reminder for All Energy Suppliers
Ofgem’s intervention in this case also serves as a cautionary reminder to all energy suppliers. The regulator has made it clear that they will not tolerate mistakes that affect consumers and will continue to hold companies accountable. Friel added: “This ruling 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.”
The £7 million in refunds and goodwill payments, including £5.6 million in direct refunds and £1.4 million in goodwill gestures, will go a long way to compensate affected customers. However, the incident calls attention to the ongoing need for stricter oversight and improved accuracy in energy billing systems across the sector.
