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Ten UK energy suppliers including EDF, E.ON and Octopus are to pay £7m in compensation and refunds after overcharging customers, after a review by the energy regulator for Great Britain.
Ofgem said the suppliers have agreed to pay more than 34,000 customers compensation and refunds because of erroneously billing them more for standing charges – daily fees that are added regardless of how much energy is used – than is allowed under the regulator’s price cap.
The affected customers all had what is called restricted meter infrastructure, meaning more than one electricity meter point recording usage at their property, and were erroneously overcharged between January 2019 and September 2024.
While energy suppliers are allowed to apply multiple standing charges for homes with multiple electricity meters, companies are not allowed to break Ofgem’s price cap, which limits the maximum amount that can be charged in each unit of electricity or gas used.
Charlotte Friel, the director of retail and pricing 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.”
The 10 suppliers have agreed to pay out £5.6m in refunds and almost £1.4m in goodwill payments.
Ofgem found that Octopus had the most customers affected by the error in overcharging, at 20,862 of the 34,048. The other suppliers to give refunds were E.ON Next, Ecotricity, EDF, Outfox the Market, Ovo Energy, Rebel Energy, So Energy, TruEnergy and Utility Warehouse.
“Today’s outcome serves as a reminder to all energy suppliers that they must implement the price cap properly and do their due diligence,” Friel said. “It also shows that, where appropriate, Ofgem is prepared to work with suppliers that fail to comply with our rules.”
Earlier this week, Ofgem ordered Good Energy to pay a total of £150,000 to former prepayment meter customers because of a failure to issue final bills.
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Since 2014, Good Energy failed to send final bills to customers within six weeks of customers leaving the company, as is required under energy supplier licences.
Ofgem found that 2,284 customers were affected and the average sum paid per customer was £66.
