Money Wellness
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calendar icon19 May 2023

Are you set for a payout from your energy provider?

Good Energy and OVO Energy, two of England’s leading energy providers, will have to pay out a total of £2.7m in compensation to thousands of customers who were overcharged.

Ofgem, the energy industry regulator, found that both businesses had charged over the maximum rates allowed under the energy price cap and energy price guarantee.

What are the energy price cap & price guarantee schemes?

The energy price cap is set by Ofgem and limits the amount suppliers can charge for each unit of energy.

It was put in place in January 2019 to stop customers being ripped off by energy businesses.

In autumn 2022, the government then introduced the energy price guarantee, as part of a package to help with cost-of-living rises, to further protect households from soaring energy bills. It was designed to bring energy costs down to roughly £2,500 a year for the average household on a dual-fuel tariff.

Ofgem’s findings

Ofgem found that around 18,000 customers did not receive the protection they were due from the suppliers. Good Energy overcharged nearly 6,966 customers a total of £391,650 between January 2019 and October 2022. And between October 2022 and March 2023, a total of 10,987 customers were overcharged £1.49m by OVO Energy.

Anyone affected by the overcharging will be automatically refunded and receive compensation. The average amount set to be repaid to Good Energy customers will be £109. While OVO Energy customers will receive an average of £181.

The suppliers will also pay an additional £1.25m to Ofgem’s voluntary redress fund, which supports vulnerable customers across the UK.

What should you do if you feel like you’ve been overcharged

If you receive a particularly large bill after a price rise, or a large estimated bill, you should contact your supplier to ask about it. If you’re not happy with their response, you can make a complaint.

Your supplier is obliged by Ofgem to treat your complaint fairly. If you don’t get a response within eight weeks you can take the complaint to the Energy Ombudsman for investigation.

What if you can’t afford your energy bill?

If you’re finding it difficult to pay for your gas and electricity, you should contact your energy provider as they may be able to help you. Some energy providers also have a hardship fund for customers who are struggling.

It’s important that you don’t just stop paying your bill. If you don’t speak to you supplier, they might disconnect you.

Energy arrears are classed as a ‘priority debt’. This means you need to pay them before debts like credit cards and loans.

If you’ve fallen behind with your bills or you’re struggling with any repayments, we can help with free debt advice

Avatar of Caroline Chell

Caroline Chell

Caroline has worked in financial communications for more than 10 years, writing content on subjects such as pensions, mortgages, loans and credit cards, as well as stockbroking and investment advice.

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