(Reuters) -Shell Plc’s UK retail energy business has to pay 536,970 pounds ($635,181) for overcharging some customers on its default tariffs which are subject to a price cap, Britain’s energy market regulator Ofgem said on Thursday.
The payment by Shell Energy includes a refund of 106,000 pounds to the affected prepayment customer accounts as well as 400,000 pounds to Ofgem’s voluntary consumer redress fund which directs money to charities, trusts and consumers as a result of licence condition breaches.
Shell Energy Retail Ltd in March reported that it had overcharged 11,275 prepayment customers over three years from January 2019 due to operational errors related to the implementation of its default tariffs.
Under these tariffs, the amount Britain’s energy suppliers are able to charge customers is limited by Ofgem’s price cap.
This year, that cap has been raised substantially due to much higher wholesale energy costs and is due to rise further still from October.
Ofgem said it had decided not to take formal enforcement action against Shell Energy as the firm self-reported the issue and had put in place steps to address the failings.
“We’re sincerely sorry that errors updating our prepayment meter rates resulted in some customers being overcharged for a period of time,” a Shell Energy spokesman said.
“The overcharge, which averages 9.40 pounds per customer, will be refunded along with a gesture of goodwill. We will be writing to customers to let them know,” he added.
In 2019, Shell Energy had agreed to refund and compensate 12,000 customer accounts it overcharged when the price cap was introduced.
($1 = 0.8454 pounds)
(Reporting by Aby Jose Koilparambil in Bengaluru and Nina Chestney in London; Editing by Anil D’Silva and Christopher Cushing)