A compliance review by the regulator showed that more than 34,000 customers were erroneously billed too much for standing charges.
This issue specifically impacted customers with ‘Restricted Meter Infrastructure’ between January 2019 and September 2024, which means they have more than one electricity meter point at their property recording energy usage.
Energy suppliers are allowed to apply multiple standing charges for homes with multiple electricity meters. However, this meant that some customers were erroneously charged more than is allowed under the price cap when combined with unit rates.
Ofgem said it expects “suppliers to be vigilant and ensure customers are not charged more than the price cap” – this includes ensuring the application of multiple standing charges does not lead to price cap overcharging.
The energy price cap limits how much energy suppliers can charge for both standing charges and unit rates for gas and electricity. The cap is currently £1,849 per year for Q2 2025 (April to June).
Click here to view our Sponsored Content Hub
Ofgem said that after identifying the issue and investigating, the suppliers “swiftly rectified the issue” and agreed to pay a total of £7m in refunds and compensation to those affected. This includes £5.6m in refunds and almost £1.4m in goodwill payments.
Charlotte Friel, director of retail pricing and systems at Ofgem, said: “Our duty is to protect energy consumers, and we set the price cap for that very reason, so customers don’t pay a higher amount for their energy than they should.
“We expect all suppliers to have robust processes in place so they can bill their customers accurately. While it’s clear that on this occasion errors were made, thankfully, the issues were promptly resolved, and customers are being refunded.
“Today’s outcome serves as a reminder to all energy suppliers that they must implement the price cap properly and do their due diligence. It also shows that, where appropriate, Ofgem is prepared to work with suppliers that fail to comply with our rules.”
All 10 suppliers have updated their systems and processes to prevent the error occurring in the future.
Ofgem said it will continue to engage with suppliers to ensure that the payment packages are progressed in full, and will continue to closely monitor all suppliers to ensure they implement the price cap properly and protect their consumers from paying too much for their energy.
