Decision to close compliance engagement with iSupply Energy on the requirements of condition 28A of its gas and electricity supply licences
Decision
Publication date
Company
Industry sector
Supply and Retail Market
Licence type
- Gas Supplier Licence
- Electricity Supply Licence
Related links:
All suppliers are obligated to ensure that between 1 April 2017 and 31 December 2020 that they do not charge PPM customers more than the ‘Relevant Maximum Charge’ for supply activities. This is covered by Standard Licence Conditions 28A of the gas and electricity supply licences.
The ‘Relevant Maximum Charge’ which is referred to as the PPM price cap, is one of the remedies introduced following the Competition and Markets Authority’s (CMA) Energy Market Investigation. It is a temporary remedy, and is due to expire at the end of 2020 when the smart meter rollout is expected to be completed. It covers all domestic prepayment customers (except those with a fully interoperable smart meter).
In June 2018, iSupply Energy self-reported that they had discovered an error with their system which affected some of their PPMs dating back to 2012. This error caused the PPM key to not accurately update the meter with the most recent tariff rates. This resulted in an estimated 5,500 PPM customers being undercharged, and a further 2,039 PPM customers being overcharged for their consumption. In cases of the overcharged customers, some had breached the PPM cap. This system error mainly affected customers who had either switched to iSupply Energy with an existing PPM, or who had a PPM installed under warrant.
In response to our compliance engagement, iSupply Energy agreed to take the following actions:
- Refund and pay compensation to all customers who had been overcharged for their consumption. This included agreeing to take all reasonable steps to trace customers who had left iSupply Energy;
- To be transparent with existing customers who had been undercharged. Informing them that they would not be required to re-pay the undercharged amount, but that their energy costs would be increasing as they would be moved to the correct tariff; and
- To implement changes to their system to prevent this or a similar error from re-occurring.
In addition, iSupply Energy agreed that any unallocated redress, for customers who couldn’t be traced or who never cashed their redress payment, would be donated to the Energy Industry Voluntary Redress Scheme (EIVRS). The EIVRS is open to charitable organisations that support energy customers in England, Scotland and Wales. Charities can apply for a grant which can fund projects which can help make homes more energy efficient, or providing advice that helps consumers keep on top of their bills.
At the end of February 2019, iSupply Energy reported that it had successfully returned £28,183.68 to customers. This consisted of £15,326.24 in refunds, and £12,857.44 in compensation payments. The unallocated redress of £12,066.88 was donated to the EIVRS.
In deciding to end our compliance engagement on this matter, we have considered iSupply Energy’s conduct during our engagement and the actions it has taken to rectify the issue. Specifically, we have given regard to the fact that iSupply Energy self-reported the matter, promptly committed to upgrading its systems to prevent this error from reoccurring, and compensated affected customers.
Key lessons learned from this case:
All suppliers must ensure that their PPM key is up to date with the correct tariff information. This is particularly relevant when:
- A customer has moved supply with an existing PPM;
- Ensuring that a PPM is functioning correctly in cases where it has been installed under warrant; and
- There have been changes to ‘Relevant Maximum Charge’ under the PPM price cap.