Thousands of Ovo Energy and Good Energy customers are in line to receive an average of £150 in compensation after having been overcharged, Ofgem has announced.
Administrative errors at Ovo saw the supplier charge some households more than the rate of the energy price guarantee between October 2022 and March 2023. Good Energy’s overcharging took place earlier - between January 2019 and last October. The energy regulator has described the failings as “totally unacceptable”.
It comes after Ofgem revealed more than 100,000 consumers who had experienced disruptions while switching away from E.On Next, Octopus Energy and Good Energy had been remunerated. More people are expected to switch gas and electricity tariffs this summer as wholesale energy price drops start to feed through to domestic bills.
The current £2,500 average rate of the energy price guarantee expires at the end of June, with energy bills likely to fall under the Ofgem Energy Price Cap again. Costs went up in April as a result of the expiration of the government’s £400 winter support scheme.
So, how much will Ovo and Good Energy customers get in compensation - and how can you make sure you’re not being overcharged?
How much of a refund will Ovo and Good Energy customers get?
On Thursday (18 May), energy regulator Ofgem announced Ovo Energy and Good Energy would pay out a combined £4 million in compensation for overcharging customers.
Around 18,000 households, who were meant to be paying no more than the rates set out under the energy price guarantee, were overcharged for the six months to March 2023. Ofgem has not revealed how much extra these people were paying for their energy.
Ovo and Good Energy will directly pay out £2.7 million to their affected customers. Ovo will pay out an average of £181 to almost 11,000 affected households on fixed tariffs, while Good Energy will pay out an average of £109 to more than 6,900 people.
The suppliers will also pay £1.25 million to Ofgem’s voluntary redress fund - a pot of money that is used to help vulnerable consumers across the UK. The energy regulator said they had self-reported their problems, which meant the compensation packages were smaller than they would otherwise have been.
Dan Norton, deputy director of retail at Ofgem, said: “Protecting consumers is always our top priority, and we expect suppliers to ensure customers pay no more than the level of the price cap or Energy Price Guarantee – schemes put in place with the very purpose of helping people.
“It is totally unacceptable that Good Energy and Ovo Energy customers were overcharged, particularly at a time that is already so challenging and stressful for consumers across the UK. Energy suppliers should hear this loud and clear: we expect suppliers to act with the utmost care and integrity. We will continue to hold them to account if they do not meet their customer protection or reporting obligations.”
An Ovo spokesperson said the provider was “very sorry” and added that its issue “has now been fixed”. Good Energy CEO Nigel Pocklington said his firm was also “very sorry” and pledged to put things right. He said: “We have been contacting those impacted to apologise and issue their refunds and goodwill payments and will be fixing the issue so it does not happen again.”
NationalWorld's money editor Henry Sandercock urges people to keep a record of their meter readings
"In the age of smart meters, you would have thought overcharging would no longer be possible. But what this saga underlines is that it’s worth keeping tabs on how many units of gas and electricity you’re using so you can get an idea of what your bill should look like. I check my readings once a fortnight, but you can make it a monthly thing - as long as you’re adhering to your billing dates, you can make a direct comparison. All you need to calculate your bill is your standing charge rate, your unit rate and readings from two different dates."
Could you be in line for an energy bill refund?
From what Ovo Energy and Good Energy have said, they have either contacted or compensated the affected customers they have identified.
But that isn’t to say you haven’t been - or are not at risk of being - overcharged. With the worst cost of living crisis in decades still hitting out budgets, it’s worth keeping tabs on how much you’re being charged for your gas and electricity.
Natalie Mathie, energy expert at comparison site Uswitch.com, has advised people to get on top of their energy accounts. She said: “With unit rates and standing charges about to change again on 1 July, it’s good to get into the habit of checking that these are reflected on your energy bill.
“It’s important to always keep an eye on anything coming out of your bank account and if you spot something unusual, contact your provider straight away. It is vital to have your energy account details up to date, and you should provide monthly meter readings if you don't have a smart meter - or ask your supplier to send someone to read your meter. If no actual meter readings are taken, then your supplier will rely on estimates which can often be off the mark and will result in an inaccurate bill.”
If you think you have been overcharged, you should raise the matter with your supplier. Ofgem says they should have a clearly-defined complaints process. It also urges people to keep a record of what contact they have had with their provider.
Citizens Advice can also give guidance on what rights you have. If you’re classified as a vulnerable household, it runs an Extra Help Unit which can be contacted either through an online form or over the phone on 0808 223 1133 (0808 196 8660 in Scotland).
If eight weeks pass and your dispute with your energy supplier has reached a stalemate, Ofgem recommends approaching the Energy Ombudsman. This service can force a company to correct a problem, apologise and pay compensation.
To contact the scheme, you can call 0330 440 1624 or fill out the online form on its website. Ofgem itself cannot deal directly with consumer complaints but it keeps tabs on market activity through supplier complaints data, which they legally have to provide it with.