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Energy firms could give back £1.4bn to customers in credit, according to Ofgem

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Energy regulator Ofgem wants to limit the amount in credit ­balances suppliers can keep which could mean each household getting back £65 on average. It follows concerns by the ­regulator that some firms may be using the excess money to fund “otherwise unsustainable” business practices.

Customers on direct debit pay the same amount each month based on estimated consumption.

Typically they build up credit in the summer when use is lower and draw down on the balance in winter. But Ofgem says suppliers should reset the credit balance to zero each year because many people are overpaying. The plan could be rolled out next year.

Peter Earl, of Comparethemarket.com, said: “Proposals to return credit balances in a timely manner should be welcomed, especially given the burden the past year has placed on people’s finances. Ultimately, any credit belongs to the customer.”

Jonathan Brearley, Ofgem chief executive, said: “These ­proposals would ensure suppliers are not holding on to more money than absolutely necessary, potentially returning millions.

“This is an important step in making the retail energy market fairer for consumers.”

An Energy UK spokesman said: “Some suppliers already refund credit balances automatically so we now need to look in detail at Ofgem’s proposals.”



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