Jan 25, 2010 - Ofgem investigation -

Jan 25, 2010 - Ofgem investigation -

Mark has referred the energy watchdog Ofgem to the Parliamentary Ombudsman over its handling of an investigation into Npower's pricing practices. He believes that the watchdog mishandled its eleven-month investigation. The complaint against energy company Npower was made to Ofgem in early 2008 by Energywatch. It concerned the fact that around 2.2 million of Npower’s gas customers on “two-tier” tariffs had been charged for more than the yearly maximum of 4572 kWhs at the high-tier rate. This meant that affected customers could be out of pocket by anything up to £100 each, the average overpayment being £50, and that Npower might have overcharged those customers in total by over £100 million. Npower admitted that it had charged these customers for too many units at the high-tier rate but claimed firstly, that it was entitled to do this and secondly, that customers had been compensated by a general price reduction. In April 2009 Ofgem delivered a report on its investigation to Consumer Focus (the successor to Energywatch) which said that Npower should repay £1.2m to 200,000 of its gas customers. But Mark believes that this investigation and its recommendations were not tough enough. Mark has been told by his constituents that when customers approached Npower individually for refunds they received a range of excuses and denials from Npower. While most customers gave up at this point, those customers who persisted with their claims received private offers of payment in full on a “goodwill basis” far in excess of the Ofgem £6 token compensation arrangement. When one of his constituents received one of these “goodwill” payments, Npower wrote to Mark advising him not to disclose details of the payment to anyone. Npower later attempted to argue that it did so to comply with the Data Protection Act. In an adjournment debate in Parliament last July, he called for new powers to help consumers who have to deal with energy companies. He was also concerned that since the closure of Energywatch there has been too little help given to consumers fighting for their rights. Energywatch was scrapped in 2008 and its functions transferred to Ofgem and to Consumer Focus, a broad-based consumer body. Now Mark has referred Ofgem to the Parliamentary Ombudsman at a constituent's request Mark said: "Ofgem claim that they lack the necessary powers to act against companies like Npower and are seeking remedies in the bill currently going through parliament . However they have conceded to me that in this case they could have "stopped the clock" on the inquiry allowing them to use penalties instead of the voluntary deal they struck with the company. It was this failure to manage the inquiry properly which has produced inequity - some customers getting compensation which reflects their usage while others get a token sum unrelated to the gas they used."

Mark Todd