Supplier compliance with Price Cap Requirements for Customers with Restricted Meters

Decision
Publication date
Company
E.ON Next Energy Limited Ecotricity Limited EDF Energy Customers Limited Electricity Plus Supply Limited Foxglove Energy Supply Limited Octopus Energy Limited Octopus Energy Operations Limited OVO Electricity Limited Rebel Energy Supply Limited So Energy Trading Limited Tru Energy Limited
Industry sector
Supply and Retail Market

Ten suppliers will pay a total of £7 million for erroneously overcharging customers with restricted meters protected by the price cap. 

Ofgem has concluded compliance engagement with 10 suppliers in relation to Standard Licence Condition (SLC) 28AD.1. This requires suppliers to ensure that the charges applicable to each Relevant Customer do not exceed the price cap. This includes customers with Restricted Meter Infrastructure. 

Summary of supplier engagement 

In response to reports that some Relevant Customers were being charged multiple standing charges, Ofgem worked with suppliers to review compliance with SLC 28AD.1. Ten suppliers were alerted to the fact that they had erroneously overcharged 34,048 Relevant Customers with Restricted Meter Infrastructure by charging multiple standing charges, that in aggregate with unit rates, exceeded the price cap for varying periods of time between January 2019 and September 2024. This was a complex overcharge issue that only impacted customers who have more than one related electricity meter point. 

The suppliers promptly refunded customers and took remedial action, including compensating customers and have provided assurances that this will not reoccur. The total redress comprises: 

  • direct customer refunds totalling £5,645,963.37 
  • customer goodwill payments totalling £1,383,685.26 

Ofgem considers overcharging customers a serious matter, however we are satisfied that the suppliers involved engaged positively and worked collaboratively to take prompt action once this complex overcharge issue was identified. The suppliers involved have updated their processes and systems to prevent similar overcharge issues from reoccurring. 

Price cap requirements for Restricted Meter customers 

The price cap sets a maximum rate that suppliers can charge Relevant Customers. The price cap is calculated depending on a number of factors, including a Relevant Customer’s location and, for electricity, whether their tariff uses a Multi-Register Metering Arrangement (for example for restricted meters or a time of use arrangement) or uses a Single-Rate Metering Arrangement (for example single rate tariffs which do not vary by time of use). 

Restricted Metering Infrastructure means that there is usually more than one electricity meter point (MPAN) at the property. While charging multiple standing charges is not prohibited by the protections for Relevant Customers, the price cap protections (SLC 28AD.1) require suppliers to ensure the aggregate amount of all charges to each Relevant Customer does not exceed the price cap. This includes ensuring the application of multiple standing charges does not lead to price cap overcharging. 

We expect suppliers to be vigilant and ensure that all eligible customers are protected by the price cap. Ofgem will continue to closely monitor all suppliers approaches to the implementation of the price cap. 

Summary of redress 

The redress set out in the table below reflects the cooperative nature of the compliance engagement. Ofgem will continue to engage with suppliers ensuring that the redress packages are progressed in full. 

Supplier  Number of customers   Total Refunds  Total Goodwill 
E.ON Next  160  £45,195.82  £9,330.33 
Ecotricity   166  £36,633.12  £18,904.35 
EDF Energy  3  £112.29  £30.00 
Octopus Energy  20,862  £2,636,884.00  £546,278.00 
Outfox The Market  570  £6,106.06  £4,590.00 
OVO Energy  2,372  £602,066.05  £280,068.73 
Rebel Energy  15  £2,339.49  £575.00 
So Energy  1,558  £266,041.16  £58,285.85 
Tru Energy  70  £7,486.54  £11,663.00 
Utility Warehouse  8,272  £2,043,098.84  £453,960.00 
Total  34,048  £5,645,963.37  £1,383,685.26 

Notes 

  1. This specifically concerns customers with more than one related electricity meter point (MPAN) at the property where electricity consumption is recorded separately. A restricted meter allows for electricity customers to be charged lower rates for electricity used at times with reduced overall demand. 
  2. A ‘Relevant 28AD customer’ (defined in SLC 28AD), is a customer on a standard variable tariff (default tariff) protected by the price cap. 
  3. While there is nothing preventing suppliers from charging multiple standing charges, this was concerning to Ofgem as being charged multiple standing charges could result in Relevant Customers being charged above the price cap level.