British Gas have definitely not overcharged you- but will pay £10m to charity
If it’s not the banks, it’s the energy companies fulfilling the role of consumer villain, and this time it’s the turn of homegrown British Gas who have been caught with their trousers down.
The basics of the story are that different strengths of natural gas (calorific value) can be charged at different rates- after all gas that is proportionately hotter will heat things up quicker, so you will use less of it. If energy companies couldn't charge more for hotter gas, think of all the money they'd lose out on. Ofgem makes the rules for this kind of thing, and ordered energy companies to round down customers into the nearest calorific value band to one decimal place. However, it conspires that British Gas decided to
completely ignore this instruction offer a different interpretation of the rules, and between 2006 and 2011 were using four decimal places instead of one, which put an unspecified number of customers in a higher calorific banding, meaning they were charged more for their gas. Ofgem said "British Gas' interpretation of the regulations meant that although customers didn't pay for energy they did not receive, they paid more than regulations allow."
However, British Gas pooh pooh the idea that anyone has been over charged, and as a result no-one will be getting a refund. They claim that, had they been forced to downgrade these customers, they would have just increased the unit price so no-one would have been better off. Ofgem seem to be too weary to argue any longer and have accepted this excuse on condition that British Gas donate £10 million pounds into a charitable fund aimed at helping people with energy bills etc. Note that this is not a fine, but a goodwill gesture on behalf of British Gas who just want to “move on.” To put this ‘voluntary’ payment into context, it is barely smaller than the £10.5 million pound fine imposed on Scottish and Southern Energy earlier in the year for prolonged and extensive mis-selling. Good job British Gas didn’t do anything wrong then.
While there are no refunds on the table for disgruntled British Gas customers, you could still avail yourself of some of their money by applying to the British Gas Energy Trust and you don’t even have to be a British Gas customer. As well as funding energy debt relief charities and energy saving schemes, the trust “helps individuals and families living in fuel poverty or other suffering or distress who are struggling with their gas and/or electricity debts by awarding grants to clear those debts. The aim of the Trust is to give vulnerable individuals a fresh start and enable them to keep free of fuel debts going forward.”
Perhaps it would be more charitable to just charge people less in the first place?