Ovo Energy and Good Energy have been ordered to pay £4m after overcharging thousands of households on their gas and electricity bills by breaching the government’s energy price cap.
The affected households will receive a combined total of £2.7m from the two companies while an extra £1.25m will go to vulnerable customers in the UK under Ofgem’s voluntary redress fund.
The energy regulator for Great Britain, Ofgem, found that Ovo overcharged almost 11,000 customers by nearly £1.5m, or an average of £181 for each household, by failing to apply the government’s energy price guarantee which sets a maximum rate for every unit of energy used between last October and March.
Good Energy overcharged just under 7,000 households a total of £391,650, or about £109 on their energy bills.
The suppliers will repay the amounts to their customers, and have been ordered to make extra compensation payments for the “totally unacceptable” breach to the Ofgem fund.
Good Energy will pay £1.25m to the redress fund “for the inadequate systems, processes and repeated inaccurate reporting of information” over an extended period, the regulator said.
The regulator said that Ovo’s contribution to the fund – just £10,000 – would have been considerably higher had the supplier not quickly reported the problem to Ofgem and resolved it.
The energy price guarantee, under which the government subsidises energy bills, was introduced last October to shield households from the soaring price of wholesale gas, linked to the war in Ukraine. The policy aims to limit typical annual bills for an average household to £2,500 and was extended at that rate after a U-turn by the chancellor, Jeremy Hunt, in March.
Dan Norton, the Ofgem deputy director of retail, said it was
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