In the past five years energy companies have made £191 million in voluntary redress payments when they broke rules, in addition to direct payments made to customers. Now Ofgem has appointed the Energy Saving Trust (EST) to manage the allocation of such redress payments to charitable organisations.
Under Ofgem’s redress process, energy companies who break the rules can agree to make voluntary payments to help energy consumers through charities, trusts and third party organisations in lieu of, or in addition, to a financial penalty. These payments are made in addition to direct compensation to affected customers. Energy companies may also offer to make such payments for poor service, without Ofgem finding of a breach of the rules.
Ofgem has chosen the Energy Saving Trust to manage how these funds are distributed in future, following an open procurement process. This follows our decision last year to hand management of redress allocation to charitable organisations to an expert independent third party organisation.
The Energy Saving Trust will identify potential charitable recipients and allocate funds, which could include schemes to help fuel poor, indebted and vulnerable customers, as well as develop innovation in the sector. It will also be responsible for monitoring and evaluating the performance of the funds to ensure that they deliver value for consumers.