Utilita refunds £3.61m for mistakenly overcharging prepayment customers
Press release
Publication date
Industry sector
Supply and Retail Market
Utilita has refunded £3.61 million after it failed to correctly implement price cuts to within the level of the new prepayment meter safeguard tariff for some of its smart meter customers.
Due to technical issues, Utilita failed to meet the level of the cap in April for prepayment customers on multi-tier Smart Metering Equipment Technical Specification 1 (SMETs 1) and Non SMETS Smart (NSS) smart meter tariffs. (1) Around 348,000 customers were affected in total. As a result, customers were overcharged in total £3.54 million. (2)
Utilita became aware of the failure with SMETs 1 meters in April, and the failures with NSS meters in May. In both cases, the supplier promptly raised these issues with Ofgem.
Utilita has since addressed the issues so that it meets the level of the prepayment safeguard tariff cap for customers on these tariffs. It has reimbursed almost all affected customers’ money lost due to the failures, and paid a further £68,000 compensation to affected NSS customers. (3) Affected customers have been contacted, so consumers should not need to take any action.
Due to these steps, and Utilita’s quick action in coming forward to report the issue to Ofgem, Ofgem has decided to close the compliance case without taking further action.(4)
Anthony Pygram, partner for consumers and competition at Ofgem, said: “It’s crucial that suppliers meet the level of the prepayment safeguard tariff cap for all eligible customers.
“Utilita acted quickly to engage with Ofgem, and has since resolved the issue and redressed customers who overpaid on their energy due to their failures. Taking into account these actions, we have decided to close this compliance case.”
Notes to editors
- Ofgem introduced the safeguard tariff for prepayment meter customers on April 1 2017. The safeguard tariff, which is being extended to more vulnerable households next year, protects these customers from paying too much for their energy. The tariff was capped at on average £1,067 per dual fuel customer in April this year. Suppliers cannot price prepayment tariffs above the cap but are able to price below it.
- Utilita offers multi-tier tariffs for customers on prepayment smart meters, which charge customer different rates according to the amount of energy they use. To meet the level of the prepayment safeguard tariff, the usage threshold at which customers started paying cheaper unit rates should have been reduced. Due to technical issues, this did not happen for customers on SMETS 1 (newer) and NSS (older) smart meters.
- The issue affected around 329,000 SMETS 1 customers and around 18,000 NSS customers.
- In both cases Utilita took quick action when it became aware of the failures, to report the issues to Ofgem and to resolve them. This includes correcting the usage thresholds, and redressing adversely affected SMETS 1 meter customers in total £2.72 million and NSS meter customers £890,000 including £68,000 compensation. £55,000 remains to be returned to consumers (mostly including unredeemed vouchers). Ofgem is satisfied with the steps that Utilita has taken and has now closed this case.
Further information
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About Ofgem
Ofgem is the independent energy regulator for Great Britain. Its priority is to make a positive difference for consumers by promoting competition in the energy markets and regulating networks.
For facts, figures and information about Ofgem’s work, see Energy facts and figures or visit the Ofgem Data Portal.