ScottishPower Energy Retail Ltd will pay £1.5 million in refunds and compensation after it charged customers above the price cap during the height of the energy crisis.

Ofgem agreed the redress package after the supplier 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 (on receipt of bill).

The average amount overcharged during this period was £149 per customer.

As a result, ScottishPower has paid a total of £250,000 in direct refunds to affected customers, plus another £250,000 in goodwill payments – equating to an average of £294 per customer. All payments were made automatically, and customers do not need to do anything.

ScottishPower has also agreed to pay £1 million to Ofgem’s Energy Industry Voluntary Redress Fund, which benefits charities and community projects that help vulnerable customers with energy-related support.

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. 

“Suppliers must be vigilant and act quickly to resolve billing errors that impact customers. We will continue to closely monitors all suppliers and will hold them to account if they do not meet the standards we set.”

ScottishPower reported itself to the regulator last summer, when it discovered that operational errors had led to direct debit customers being charged the standard credit tariff. 

This overcharge initially began in 2015 and continued across 11 price cap periods to June 2023 – a period when energy prices reached historically high levels, prompting the government to step in and provide additional support. In determining this redress package, Ofgem considered the additional strain and financial hardship that ScottishPower’s error may have caused customers during this time.

While the error is a serious matter, the regulator has taken into account that ScottishPower self-reported the issue and put in place steps to address the failings. Had Scottish Power not self-reported and resolved the issues in a timely manner, the redress package sought would have been considerably higher.

Djamila Serir is one of the Community Energy Advisors working on our Liverpool Affordable Warmth project

Energy Projects Plus delivers the Liverpool Affordable Warmth project, funded by British Gas Energy Trust.

Recognising the need to support people who don’t speak English as a first language, we started to work with Liverpool Arabic Centre to spread the message about energy advice further and support those who are struggling with energy issues.

We now run two sessions a month in partnership with the Arabic Centre – an energy awareness session focusing on damp, mould, condensation and providing some energy saving tips, and a pre-bookable drop-in session where people can benefit from specific advice about their individual situation. We’re also in the process of translating our energy advice materials into Arabic, to support our clients further.

Djamila Serir is one of the Community Energy Advisors working on the project. She speaks Arabic and met with one of the team from the Arabic Centre through referrals to the service before exploring potential partnership opportunities further.

Djamila said:

“Although I speak Arabic, I’ve never had to use the centre – I didn’t even know where it was. We worked together to support some people who were referred to us before we formalised the partnership properly. They support people in every aspect of their lives but told us they were seeing loads of people who had energy issues, so that’s where we were able to step in to provide that specialist support.
For some people, just the idea of people picking up the phone is a barrier, so when they get through and there’s an extra language barrier, it takes time and can be very frustrating. It can take an hour to get through in the first place, and many will eventually be able to translate but it can take extra time. By having a partnership like this, we’re able to support people there and then.

It’s not a one-off thing either, our support lasts. Every person I support, I probably speak to five, six, or seven times. For example, it may start with voucher support for a top up meter, but what happens when that voucher doesn’t work? We’re there to help them every step of the way. We’re building relationships and our support isn’t transactional.”

The charity recently supported a woman who had received an energy bill of more than £2,000. She realised it wasn’t right but didn’t know how to challenge it. With Djamila’s support, it was found that the meter had been read incorrectly and charges should only have been £75.

And on the back of this success, the charity is looking to expand is multi-lingual services further to support other communities in need.

Project Manager Lisa Boothroyd said:

“Within the last couple of years, certainly since the pandemic and with the cost-of-living crisis, we’re seeing a lot of people coming to us with issues around rising fuel and water debt. Utility providers are not being very accessible to speakers of other languages. Working with places like Liverpool Arabic Centre allows us to really break down those barriers. Building on this success, we’re now preparing to work with other organisations.”

The charity is also working with a wide range of likeminded organisations such as Raise, The Big Help Project, Everton Football Club, The Life Rooms, Cobalt Housing and Clubmoor Children’s Centre to widen the message around energy advice.

As ever, today’s announcements made by the Chancellor will take a while to digest, once further details are made available. But there are always some key soundbites listeners are keen to hear. Here are a couple of our favourite moments:

1. Household Support Fund

Originally knows as the “COVID Winter Grant Scheme” this fund has been around since 2020, providing Local Authorities with additional funding to help support vulnerable residents. A lot of the money has been provided to ensure children can access food, and to help elderly residents better afford to keep warm over the Winter. Energy Projects Plus has been working with multiple Local Authority partners to deliver some aspects of the Household Support Fund, such as:

• Emergency fuel vouchers for low-income prepay customers at risk of self-disconnection
• Payments to energy suppliers of non-prepay customers, struggling with their bills
• Reducing/clearing utility debts
• Repairing/replacing faulty heating systems

While energy bills are starting to fall, there hasn’t been as quick a drop as would be required to remove energy bill concerns from the minds of millions of residents around the country. We therefore welcome the 6 month extension of the Household Support Fund. 

2. Energy Production Windfall Tax

Many people are unaware that our energy suppliers have been struggling to survive these past few years, as the prices they have to pay for gas have often been higher than they’re legally allowed to sell it to us for.

This is why dozens of UK energy suppliers have collapsed since the prices started shooting up, at the end of 2019.

The “gas giants” like BP and Shell have seen massive rises in their profits, and we welcome the Chancellor’s decision to continue the windfall tax levied on these profits, for another year to 2029.

Thanks to funding from the Energy Redress Scheme, The National House Project has trained some of their young people to become qualified Energy Advisors, so they can provide energy advice to other young people, setting up home for the first time.

What do you wish you were taught about energy bills when you first set up home? Hopefully you’ll find the answer to that question, and more, during the podcasts they’ve recorded with support from National House Project’s Sam Ankers, and Dom from Energy Projects Plus (taking the hot-seat as a seasoned energy expert).

It continues to be a terrible state of affairs that an annual, national fuel poverty conference is needed, but we remain grateful to NEA for providing this opportunity for local, regional, and national organisations to gather together, hear any breaking news, digest the latest data around fuel poverty and excess winter deaths, and share best practice among ourselves.

The title of this Winter’s conference is disheartening: the Energy Crisis has been with us now for over two years, and while there seems to be a general consensus that energy costs will drop a little further in 2024, there’s no real light at the end of the tunnel for millions of households struggling to cope with massively inflated bills.

Our Business Relationship Manager, Dominic Griffiths, attended the conference to gather insights, and has compiled the following notes:

• NEA’s Chief Executive, Adam Scorer (pictured), delivered a keynote speech, including the worrying statistic that 41% of prepay meters “self-disconnected” during Autumn 2023. Adam says “crisis is when your coping mechanisms fail you.”
• From January 2024, there will be 6.5 million UK households living in fuel poverty.
• Ros Kane from Fuel Bank Foundation advises that, despite the massive rise in energy bills, approximately 90% of prepay customers still like prepay.
• Yes Energy Solutions find only 20% of clients experiencing fuel crisis (i.e. prepay customers at risk of self-disconnection) will continue to engage with additional support offered (e.g. tips on how to reduce ongoing energy bills, and help to apply for grants to make the property warmer and more energy efficient).
• Octopus Energy has recruited social workers to support their staff and customers, due to a rise in “crisis calls” (e.g. domestic violence and suicidal thoughts).
• Frazer Scott, Chief Executive Officer of Energy Action Scotland, advises the Scottish Ambulance Service has produced data showing an increase in ambulances responding to symptoms of hypothermia.
• John French, Chief Executive of the Northern Ireland Utility Regulator, advises there are no standing charges on energy meters in Northern Ireland, making us wonder why they’re considered unavoidable by energy suppliers in England.
• During the “retrofitting fuel poor homes: how can we go further and faster?” breakout session, there was general agreement that there needed to be a “fabric first” approach, with “long-term funding” in place. The current iteration of the Energy Company Obligation is due to end in 2026, but we have targets to achieve Net Zero by 2050. We need obligations that span decades, not 2 or 4 years.
• Danni Barnes from NEA described their priorities for “Winter and beyond,” including engaging marginalised communities, focusing on health inequalities, targeting the private rental sector, encouraging smart meter adoption, and retrofit projects

Highlights

There were lots of new faces at the conference. NEA has themselves grown considerably in 2023, recruiting 30 new Energy Advisors. There were also representatives from community organisations who are new to the area of providing energy advice. It was great to hear their enthusiasm for providing advice and support to households in fuel poverty, and/or fuel crisis.

Martin Lewis (pictured) made an appearance, via pre-recorded video link. His enthusiasm for ensuring everybody has all the facts at their disposal can be quite infectious, and until he appeared he’d even been a little conspicuous in his absence. He heaped plenty of praise on the frontline workers present, going into the homes of people in fuel poverty, to address the issues and support with solutions.

Lowlights

Unfortunately, the problem is getting worse, not better. Despite the millions of pounds spent on fuel vouchers, they’re merely a sticking plaster and the underlying cause of the fuel crisis needs to be assessed by a thorough intervention, that people experiencing fuel crisis are not necessarily ready to engage with. There has also been millions of pounds spent on retrofit measures, lifting some households out of fuel poverty. The fact that there is still a rising number of households in fuel poverty suggests these grants and schemes aren’t going far enough, or fast enough.

In the exhibition centre, NEA had laid out some of the “(Not) Coping Strategies” that can be seen in the homes of people experiencing fuel poverty/fuel crisis. Pictured (right) you can see such lowlights as a fridge not being switched on, despite life-saving medicine requiring refrigeration, and a barbecue being used to cook food indoors, which is both a fire safety hazard, and a potential source of lethal carbon monoxide.

It’s not the news anybody wants to hear when planning their festive activities and possibly stretching their budgets more than usual, but it’s important to keep in mind the news that Ofgem has today (Thursday the 23rd of November) announced that energy prices will rise by around 5% from the 1st of January.

For the ‘typical user’ in Cheshire and Merseyside (based on an annual usage of 2,700kWh of electricity and 11,500kWh of gas, and our local tariff and daily standing charge rates) this will mean the average monthly direct debit payment of £163 will rise to £171.

Obviously, it’s bad to hear these prices are rising, when so many people are already finding energy costs unaffordable. But it’s worth looking further ahead, to Spring 2024 when Cornwall Insight (being the company that Martin Lewis relies upon for future energy bill predictions) expect the Price Cap to drop by 6% from the 1st of April. This means the £171 monthly payment will become £161.

If you’re in credit with your energy supplier, they may not even look to increase your direct debit payment for these three months.

You can read the full Ofgem press release by clicking here.

Energy Projects Plus Chief Executive, Peter Owen, spoke to Helen Jones on BBC Radio Merseyside about the Price Cap and how important it is for people to take action wherever they can, to reduce the amount of energy they’re using, to avoid waste and keep bills under control. You can hear the full interview below:

Ofgem CEO Jonathan Brierley (right)

During a recent visit to Energy Projects Plus by Ofgem CEO Jonathan Brierley (pictured, right, at a community engagement event delivered by our Jo and Katie), our team of Energy Advisors were keen to highlight to him how unfair we feel it is for prepay customers to be expected to find additional funds to cover their daily standing charge, on days when they don’t use any energy (either through deliberate choice, or because they can’t afford it).

Each Autumn we receive panicked calls from residents who have topped-up their gas meter for the first time since Spring. They’ve spent their last £10 and the meter still isn’t providing their family with any warmth. Has something broken? No, unfortunately, the current standing charge rate of 34.2p per day for prepay gas meters in Merseyside and Cheshire, means over 6 months they will owe £62 for daily standing charge costs, which they have to pay before they are allowed to access any gas through their meter. For electricity meters the current rate is 64.33p per day in our region. Combined, they add £360 to the annual bill.

We’re not alone in thinking something needs to change: Citizens Advice, NEA, Fuelbank Foundation, Martin Lewis, and others have been active in challenging government regarding the nature of standing charges.

What are standing charges?

A client’s smart meter display, showing a debt of £65.48 outstanding.

The standing charge is a cost that is included in each electricity and gas bill. It is a cost set by your supplier. It is also included in the energy price cap that Ofgem reviews and sets every three months. Your supplier will charge you this cost each day, even if you do not use any energy on that day. The amount you pay will depend on your supplier and where you live within England, Scotland or Wales. 

The charge covers the cost to maintain the energy supply network, take meter readings, and support government social schemes, for example helping people that cannot afford energy, and environmental schemes. 

Some suppliers do not include a standing charge in their tariffs. Instead, they offer a tariff that works in a similar way, but you pay a bit more for the first one or two units called kilowatt hour (kWh) of energy you use. 

How do I have my say?

Ofgem has today (16th November) announced it’s opening up the debate about standing charges. They want to hear views from: 

• consumers, people who pay the electricity or gas bill in their household 

• energy sector, including suppliers 

• consumer groups 

• charities 

How to respond

Read Ofgem’s standing charges call for input discussion paper and reply by emailing your views to StandingCharges@ofgem.gov.uk by Friday 19 January 2024.

A team of 14 employees from BYK Additives Ltd, based in Runcorn, completed The Dales Way challenge in three days and raised £10,000 for good causes.

The Dales Way runs for a gruelling distance of 80 miles from Ilkley in west Yorkshire to Bowness-on-Windermere in Cumbria, passing through the heart of the Yorkshire Dales National Park and the foothills of southern Lakeland to the shores of Lake Windermere.

Three charities were selected to receive the shared total sum of fundraising made by the company – The Lee Cooper Foundation, Widnes Food Bank and Energy Projects Plus.

A BYK spokesman said: “The group was made-up of employees from a number of different departments, including research and development, process engineering, IT, finance, quality, operations, site services and even a retired member of staff return to support the event.