Energy firms to refund £800,000 after overcharging…

Energy firms to refund £800,000 after overcharging customers with 'unauthorised administration' fee

Two energy firms have grossly overcharged their customers with an "unauthorised administration" fee and will now have to refund hundreds of households with the total coming to £800,000. Customers have been overcharged on renewable energy deals available to properties with devices like solar panels or wind turbines affecting those with "feed-in (FIT) tariffs".

The Government FIT scheme was introduced on April 1, 2010 and promotes the uptake of renewable and low-carbon electricity letting customers who generate electricity from their property sell it for money. Regulator Ofgem said Good Energy and F&S Energy were charging customers an "unauthorised administration" fee for this, reports the Mirror.

Good Energy has now agreed to refund over £453,000 and will make extra goodwill payments totalling £200,000 whilst F&S Energy will refund £94,040 and make goodwill payments of £50,000.

Ofgem director of enforcement and emerging issues Cathryn Scott said: "The outcome of this matter sends a clear reminder to suppliers that they must comply with their obligations under the decarbonisation schemes and ensure that FIT customers receive payments they are entitled to for their renewable generation."

Good Energy chief executive Nigel Pocklington responded and said: "Our annual Ofgem audit results have consistently reflected our commitment to high levels of service for generator customers. So we were very disappointed that Ofgem consider the admin charges we applied to a less than 1% of customers, which are not typical domestic solar generators, to be non-compliant with the scheme.

"We are no longer applying this charge and have contacted all affected customers to inform them of their refunds."

Ofgem were blamed at the weekend for messing up the market and increasing gas and electric bills by Parliament’s spending watchdog. A report by MPs on the Public Accounts Committee says the energy regulator set the bar too low for new companies to set up as suppliers.

It says as a result, households have paid £2.7billion more than needed costing an average £94 each.

Chair Dame Meg Hillier said: “We have regulators to set the framework to shore us up for the bad times. Problems in the market were apparent years before the unprecedented spike in prices and Ofgem was too slow to act. Households will pay dear."

The MPs say Ofgem’s failure meant 29 energy suppliers, serving four million customers, have been failing since July last year.

The report read: "Ofgem did not strike the right balance between promoting competition and ensuring energy suppliers were financially resilient."

Ofgem bosses have received a warning themselves from MPs and have to explain within six months what they have done to improve their performance. The ministers have called for more continuity plans to protect customers when firms go bust and for Ofgem to review the energy price cap.

GMB union boss Andy Prendergast added: "The Government’s remorseless attempt to use the market to regulate energy has been a massive disaster that has left millions of households worse off.

"The market may be the right solution when it comes to selling tins of beans but has been an abysmal failure when applied to energy."