Ovo and Good Power ordered to pay £4m compensation after overcharging | Power payments

Ovo Power and Good Power have been ordered to pay £4m after overcharging hundreds of households on their fuel and electrical energy payments by breaching the federal government’s vitality worth cap.

The affected households will obtain a mixed whole of £2.7m from the 2 corporations whereas an additional £1.25m will go to weak prospects within the UK below Ofgem’s voluntary redress fund.

Ofgem, the vitality regulator for Nice Britain, discovered Ovo overcharged nearly 11,000 prospects by practically £1.5m, or a median of £181 for every family, by failing to use the federal government’s vitality worth assure, which units a most fee for each unit of vitality used between final October and March.

Good Power overcharged just below 7,000 households a complete of £391,650, or about £109 on their vitality payments.

The suppliers will repay the quantities to their prospects, and have been ordered to make additional compensation funds for the “completely unacceptable” breach to the Ofgem fund.

Good Power can pay £1.25m to the redress fund “for the insufficient methods, processes and repeated inaccurate reporting of data” over an prolonged interval, the regulator mentioned.

The regulator mentioned that Ovo’s contribution to the fund – simply £10,000 – would have been significantly increased had the provider not rapidly reported the issue to Ofgem and resolved it.

The vitality worth assure, below which the federal government subsidises vitality payments, was launched final October to protect households from the hovering worth of wholesale fuel linked to the warfare in Ukraine. The coverage goals to restrict typical annual payments for a median family to £2,500 and was prolonged at that fee after a U-turn by the chancellor, Jeremy Hunt, in March.

Dan Norton, the Ofgem deputy director of retail, mentioned it was “completely unacceptable” that Good Power and Ovo prospects have been overcharged, “notably at a time that’s already so difficult and annoying for customers throughout the UK”.

He added: “Power suppliers ought to hear this loud and clear: we count on suppliers to behave with the utmost care and integrity. We’ll proceed to carry them to account if they don’t meet their buyer safety or reporting obligations.”

Grant Shapps, the vitality safety secretary, mentioned it was “extraordinarily irritating” to see that some properties didn’t obtain safety from document vitality payments even after the federal government “took unprecedented steps to guard households at a time when payments risked spiralling and households have been dangerously uncovered to risky world vitality prices”.

“It’s proper these suppliers now pay the worth for his or her oversight and provide redress to these wronged. I’m glad to see Ofgem taking motion the place suppliers have fallen quick and utilizing the proceeds to assist weak customers,” he mentioned.

The Good Power chief government, Nigel Pocklington, mentioned the corporate was contacting the households affected to apologise and situation refunds and goodwill funds.

“We’re very sorry that we let a few of our prospects down and promise to place issues proper,” Pocklington mentioned. “Each buyer cost methodology change is now being checked and the formal enchancment plan we now have submitted to Ofgem contains new automated processes, requirements and governance to stop any comparable mistake in future.”

Ovo mentioned the provider had seen the error instantly and reported it to Ofgem. A spokesperson mentioned it had since resolved the issue with its system and made compensation funds to the purchasers affected.