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Ofgem Opens Utilita Overcharging Probe

The UK energy regulator Ofgem has started an investigation of energy supplier Utilita following allegations of overcharging prepayment meter accounts and non-compliance with 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. This was also the time when Ofgem assigned Utilita to take on customers of Eversmart Energy after Eversmart went bust.

 

Going over the price cap

 

The Prepayment Meter Price Cap entered into force on the 1st of April 2017. It is temporarily applied for prepaid 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 on typical use for dual fuel customers.

 

Utilita took on 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 non-compliance with the price cap.

 

iSupply was subjected to an Ofgem investigation was conducted last year, and the supplier later paid £1.5 million into Ofgem’s the voluntary redress fund. In June of 2019, Shell Energy was revealed to have breached 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.

 

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Ofgem investigation

 

Ofgem released a statement saying that the probe doesn’t imply that Utilita has officially breached any rule or is charged with non-compliance. As investigations are still underway, findings will be made available as soon as 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 energy supplier self-reported to Ofgem in November, indicating that it may have potentially overcharged its prepayment meter customers.

 

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

 

If found to be non-compliant, Utilita would have to pay a fine to Ofgem, and would be expected to treat customers fairly by offering a refund to those affected for the amount that they were overcharged.

 

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More on Utilita

 

Consumers of Eversmart Energy were handed over to Utilita by Ofgem last September, after the now-defunct supplier failed to pay into the redress fund for it’s own non-compliance with the Renewables Obligation (RO) scheme. Essentially, this 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 proyocol. 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 were the company to install the first smart meter in Britain back in 2018. The supplier continues to push intelligent energy for the UK and believes that it has helped transform the UK’s energy sector for the better.

 

Aside from its smart meter tariffs, the supplier is also known for offering its customers various rewards, via a rewards scheme – such as gift cards and concert tickets. Any Utilita consumer with an active electricity or gas supply or a combination of both will be eligible for these awards schemes.

 

The supplier’s smart meter is advertised to be cost-saving, boasting that it helps save enough energy to make 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.