Consumers overcharged by energy firms ‘owed rebate’

Consumers should be comp e n s a t e d a f t e r b e i n g o ve r - charged for their utilities by mo r e t h a n £ 2 0 b i l l i o n d u e to regulator errors, Citizens Advice says.

The charity said regulators h a d a l l owe d wa t e r, e n e rg y, b r o a d b a n d a n d t e l e p h o n e firms to overcharge customers by £24.1bn over the past 15 years. It is calling for companies to return some of the money to customers through a rebate on their bills.

I n 2 0 1 7, C i t i z e n s A d v i c e found Ofgem had made errors in setting price controls for energy networks, resulting in customers being overcharged £7.5bn over eight years.

Three energy network companies – SGN, Western Powe r a n d S c o t t i s h a n d S o u t h - e r n E l e c t r i c i t y Ne t wo r k s – returned £287 million to customers following the findings. But the charity said it had now found this was the “tip of the iceberg”, claiming that Ofgem made the same errors over a much longer period while regulator decisions across other markets including water, b ro a d b an d a n d p h o n e n e two r k s h a d c o s t c u s t o me r s money over the past 15 years.

I t a l l e g e s t h a t “m i s j u d g - ments” by Ofgem, Ofwat and Ofcom in setting price controls had resulted in customers paying too much for the pipes and wires that connect energ y, broadband, phones and water to their homes.

The charit y said the over - p ay m e n t s p a r t l y o c c u r r e d because regulators made forecasting errors in predicting that costs such as debt would be higher than they turned out to be, and also over- estimated how risky these businesses were for investors.

Citizens Advice chief executive Gillian Guy said: “At a time when so many people are struggling to pay their essential bills, regulators need to do more to protect customers from unfair prices.

“They have star ted to take steps in the right direction but it is vital they continue to learn from their past mistakes when finalising their next price controls.

“C o mp a n i e s n e e d t o p l ay their part in putting this multibillion-pound blunder right. They must compensate customers where they have been paying over the odds. If they don’t, Government needs to intervene.”

Last week, Ofgem confirmed i t w i l l p u r s u e e ve n t i g h t e r r e s t r i c t i o n s o n h o w m u c h profit energy companies can make, in a move it said will result in lower prices for customers.

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