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Ofgem Opens Utilita Overcharging Probe

The UK energy regulator Ofgem has started an investigation involving energy supplier Utilita over allegations of overcharging prepayment accounts and breaking legal obligations in 2019.

The probe will reveal whether the energy bills of the supplier’s customers went over the fixed price cap from May to September of last year, which is the same month that Ofgem has assigned Utilita to undertake customers of Eversmart Energy after the latter went bust.

Going Over the Price Cap

The Prepayment Meter Price Cap was initiated on the 1st of April 2017. It is temporarily applied for prepaying customers who don’t have interoperable smart meters and are under non-fixed deals. Energy providers are allowed to set prices below or equal to the price cap but are strictly prohibited from charging above the limit.

The price cap for prepayment meters is currently at £1,242/year with typical use for dual fuel customers.

Utilita welcomed about 39,000 domestic customers after Eversmart Energy ceased to trade. A few business accounts were also transferred to Utilita in September. The supplier is now the third to be investigated for price cap non-compliance.

iSupply was found by Ofgem to mistreat its customers after an investigation was conducted last year, sanctioning the supplier to pay £1.5 million to the voluntary redress fund of the regulator. In June of 2019, Shell Energy was revealed to disobey the price cap and paid £390,000.

The Competition and Markets Authority (CMA) urged Ofgem to put the cap in place to protect prepaying customers from 2020 and beyond.

Ofgem Investigation

Ofgem released a statement saying that the probe doesn’t imply Utilita has officially breached any rule or charged with non-compliance. As investigations are still underway, findings will be made available when it ends.

A Utilita spokesperson said the firm is aware of the ongoing investigation and aims to assist the energy regulator in any way they can.

The said energy supplier self-reported to Ofgem in November, indicating that it may have potentially overcharging its prepayment meter customers.

The probe will determine whether Utilita has infringed the Standard Licence Condition SLC28A that refers to the prepayment charge restriction or price cap as it’s known. The supplier is under the obligation of this policy and other gas and energy supply licences, and going above the maximum permitted price is a direct violation of SLC28A.

If found to be non-compliant, Utilita would have to pay Ofgem’s sanctioned fines and would be expected to treat customers fairly by compensating those affected for their respective overcharged amounts.

More on Utilita

Consumers of Eversmart Energy were handed over to Utilita by Ofgem last September after the now-defunct supplier failed to pay to the redress fund for non-compliance with the Renewables Obligation (RO) scheme. It means that the supplier went bust because it didn’t source enough renewable energy to supply to its customer base.

Ofgem assigned Utilita to take on Eversmart customers, protecting them through the regulator’s safety net. All outstanding credit balances of both domestic and non-domestic clients were honoured by Utilita, which included money owed by Eversmart Energy to former and existing customers.

Utilita is the energy provider that installed the first smart meter back in 2018 in Britain. The supplier continues to push smart energy for the UK and believes that it has helped transform the UK’s energy sector for the better.

Aside from its smart meter offering, the supplier is also known for granting its customers various rewards schemes such as gift cards and concert tickets. Any Utilita consumer with a live electricity or gas supply or a combination of both will be legible to join the offers.

The supplier’s smart meter is advertised to be cost-saving, quipping that it helps save up as much energy as making 26,473 cups of coffee in one year. The firm also highlights its user-friendly app and smart meter in-home display as some of the advantages for people who choose to avail of Utilita’s services.