SCOTTISH Power has repaid £1.5million to customers who were overcharged on their energy bills.
Regulator Ofgem said compensation was paid to customers who were charged above the price cap during the height of the energy crisis.
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The energy price cap works by setting a limit on the maximum amount suppliers can charge for each unit of gas and electricity.
It ensures that prices for people on default energy tariffs are fair and that they reflect the cost of energy.
Scottish Power confirmed that between 2015 and 2023, it mistakenly overcharged 1,699 direct debit customers a higher rate, which should only apply to those who pay by standard credit, or on receipt of bills.
It said this was due to a “technical error” which was discovered last year.
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Ofgem said the amount overcharged during this period was £149 per customer.
Scottish Power has paid a total of £250,000 in direct refunds to affected customers, plus another £250,000 in goodwill payments.
This has worked out to an average of £294 per customer.
All payments were made automatically, and customers do not need to do anything.
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The energy supplier, which has five million customers, confirmed that all payments have now been made into the bank account associated with the account.
Dan Norton, Ofgem’s deputy director for price protection, said: “The last few years have been challenging enough for energy customers facing increasing cost of living pressures, without the additional hardship of being overcharged.
“The price cap is there to protect consumers, and we take seriously any breaches of the safeguards we have put in place.”
He added that Ofgem will continue to monitor all suppliers and will “hold them to account if they do not meet the standards” it sets.
Andrew Ward, chief executive of Scottish Power’s customer business apologised to affected customers.
He said: “Looking after our customers is at the heart of everything we do and our immediate notification to the regulator, swift corrective action and the compensation package agreed with Ofgem show both how seriously we take this matter and our commitment to making it right.”
Scottish Power has said it has now put additional controls and monitoring in place to reduce the risk of anything similar happening in the future.
How can I challenge my energy bill?
If you pay your energy bill by direct debit, then it is assumed that this monthly amount should be “fair and reasonable”.
If you don’t think it is, you should complain directly to your supplier in the first instance.
If you’re not happy with the outcome you can take it to the independent Energy Ombudsman to dispute, but there are a few steps before you get to that stage.
Your supplier must clearly explain why it’s chosen that amount for your direct debit.
If you’ve got credit on your account, you have every right to get it back – although some experts recommend keeping it there through the summer, so your bills don’t go up in the winter when you use more energy.
Your supplier must refund you or explain exactly why not otherwise and the regulator, Ofgem, can fine suppliers if they don’t.
To ask for a refund call your supplier or contact them online.
If you are disputing a bill, taking a meter reading is a must.
If it’s lower than your estimate, you can ask your provider to lower your monthly direct debit to a more suitable amount.
But beware so you don’t end up in debt later on with a bigger catch-up bill at the end of the year from underpayments racking up.
If you don’t have success in negotiating a lower payment then you can put in a complaint to the Energy Ombudsman.
How do I calculate my bill?
To calculate how much you should be roughly paying, you will need to find out both your unit rate for gas and electricity and the standing charge for each fuel type.
The unit rate will usually be shown on your bill in p/kWh.
The standing charge is a daily fee that is paid 365 days of the year – irrespective of whether or not you use any gas or electricity.
You will then need to note down your own annual energy usage from a previous bill.
Once you have these details you can work out your gas and electricity costs separately.
Multiply your usage in kWh by the unit rate cost in p/kWh for the corresponding fuel type – this will give you your usage costs.
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You’ll then need to multiply each standing charge by 365 and add this figure to the totals for your usage – this will then give you your annual costs.
Divide this figure by 12 and you’ll be able to work out how much you should expect to pay each month.
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