Scottish Power Energy Retail Ltd will pay £1.5 million in refunds and compensation for charging customers above the price cap during 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. It applied a higher rate, which should only apply to those who pay by standard credit (on receipt of bill). 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.
Scottish Power has paid a total of £250,000 in direct refunds to affected customers, plus another £250,000 in goodwill payments – an average of £294 per customer. It 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.
Ofgem said the error was “a serious matter”, but it took into account that Scottish Power self-reported the issue and put in place steps to address the failings. It said, “Had Scottish Power not self-reported and resolved the issues in a timely manner, the redress package sought would have been considerably higher”.