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When Southend Council launched the firm Southend Energy they promised customers the best price and encouraged many of the town’s older residents to switch provider but it has emerged that some of those customers could have been overcharged as a result.
The energy supply used by Southend Energy is provided by the company OVO Energy, which was forced last week to pay £8.9million by regulator Ofgem after overcharging its customers.
The company says the problems were the result of “inaccuracies within our IT systems” causing some to not receive bills and others to receive bills which were inaccurate.
The company also failed to give some customers the correct information about renewals.
While not all of OVO’s customers have been impacted by the errors, the company did not respond to questions about how many Southend customers had been affected. The council has also been unable to provide details.
A spokesperson for OVO Energy said: “OVO Energy holds itself to high standards, but we have not always got it right. We accept Ofgem’s findings of issues regarding estimation processes, information formatting and pricing errors.
“We are proud of our record. In particular, during the time these infringements occurred, we were voted Uswitch Supplier of the Year 4 out of 5 times and achieved a customer satisfaction score of 96 per cent – the highest in the survey’s 11-year history at the time.”
Councillor Carole Mulroney, who oversees environment and planning said: “Ofgem fully investigated this matter and made their judgement accordingly.
“OVO have contacted the affected customers directly and we continue to work with them as the current providers of Southend Energy.”
Southend Energy was formed in 2015 and more than 6,000 households were persuaded to switch to the supplier – the majority being over the age of 65.
But negotiations to renew a contract between operator OVO Energy and the council collapsed in 2018 prompting negotiations to begin with the Nottingham-Council owned Robin Hood Energy.
Those negotiations are still ongoing despite it being revealed at the end of last year that Robin Hood Energy was ordered by Ofgem to pay a £9.4million tax bill after failing to meet two previous deadlines.
The energy regulator warned that if the bill was not paid it would consider revoking the company’s licence to operate, a move which could have resulted in the closure of the company.
Robin Hood Energy was eventually bailed out by Nottingham Council and Southend is nearing a five-year deal.