19 Jun 2013
Ofgem claims that British Gas, the UKs biggest gas supplier may have overcharged its customers for a period of five years between 2006 and 2011. The overcharge is a result from failing to round down the calorific value, which is a charge covering the amount of energy contained in gas used. British Gas has been using 4 decimal points when Ofgem had asked them to use one.
Ofgem said “British Gas’ interpretation of the regulations meant that although customers didn’t pay for energy they did not receive, they paid more than regulations allow.” Despite this, Ofgem has admitted that the pricing impact on customers was unclear. British Gas has denied the claim but stated that their customer had not missed out and they had adjusted the main unit price to compensate for the higher calorific value charge but it was impossible to be certain. To settle the dispute and avoid on-going legal fees, British Gas has donated £10m into a trust for vulnerable customers. When asked the reasons for this donation, they stated that “We are making this donation following clarification from Ofgem that, while we believe we were operating in line with the regulations, we accept there was an alternative interpretation”.
Figures by public opinion website YouGov show that 38% of customers trust the energy sector less than a year ago. In a bid to crack down on confusing energy prices, Ofgem will announce this week a proposal to simplify tariffs offered by the ‘big six’.