Energia rapped for overcharging customers for seven years

The Commission for Regulation of Utilities said that there was a “low average value of this overcharge over the customer’s lifetime with the supplier”, averaging out at around €1.96 per account. File photo

Electricity and gas supplier Energia has received a rebuke from the energy regulator for charging household customers incorrectly for seven years without detecting the issue.

Energia, which currently has around 200,000 household customers, had used two different systems to calculate a customer’s standing charge which led to them not being charged in line with the quoted annual standing charge over the course of a year.

It meant that all of its household electricity and gas customers were affected between January 30, 2014, and March 15, 2021, with 62% of household accounts overcharged and 38% of household accounts undercharged.

However, the Commission for Regulation of Utilities (CRU) also said that there was a “low average value of this overcharge over the customer’s lifetime with the supplier”, averaging out at around €1.96 per account.

It also found that Energia did not make customers aware of the mistake and that this was the cause of the refund and change in standing charge methodology.

Energia fix

Energia told the regulator that the fix to the billing system and the resolution of the issue arose during the Covid pandemic, at a time when it was not capable of operating at full capacity due to pandemic restrictions.

CRU said: “Energia stated that its chief concern was to ensure customers, especially those in vulnerable circumstances, could retain the ability to contact it and thus wanted to prevent a significant influx of customer calls at this time.” 

The company also said it did not want to contact lapsed customers to request their bank details to refund them as this could have potentially contravened GDPR and the conditions of its electricity and gas supply licence.

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A permanent fix to address the issue was implemented in March 2021 with overcharged existing Energia customers refunded in early 2021.

“In lieu of refunding former overcharged customers, Energia made two charitable donations to the Community Foundation of Ireland in 2021,” CRU said. 

“The administration fee of the charity was paid separately by Energia, and did not subtract from the amount directed to the charity on behalf of overcharged former customers.” 

In light of these mitigating factors, the regulator said it was satisfied that no further action was required from Energia to address the issue.

Breach

However, it still found that Energia breached the conditions of its licence.

The regulator said: “The CRU acknowledges that the pandemic restrictions impacted suppliers’ operations. However, as outlined in the Suppliers’ Handbook, suppliers must ensure that customers are dealt with in a transparent, honest and fair manner and that communications are complete and accurate.

“When a supplier becomes aware of an issue impacting customers, it must ensure that it communicates the issue in a way that meets these principles.” 

In a statement, Energia said: "As noted in the CRU’s Determination, this was an unintentional error and Energia has not benefitted financially from its occurrence. Energia has taken all necessary steps to resolve this matter, including refunding customers, and we would like to apologise to those affected as we strive at all times to ensure our customers receive an excellent service.

"Having considered the actions taken, the CRU’s determination notes that no further action is required to be taken by Energia to address this issue."