ScottishPower is to pay out more than £1 million to customers it overcharged during the height of the energy crisis.  

The energy firm has agreed a £1.5m compensation package with regulator Ofgem. The average amount overcharged was £149 per customer. 

Ofgem agreed the package after ScottishPower admitted that between 2015 and 2023, it mistakenly overcharged 1,699 direct debit customers a higher rate, which should only have applied to those who pay by standard credit. 

The energy supplier reported the technical error as soon as it was discovered last year.

ScottishPower has put additional controls and monitoring in place to reduce the risk of anything similar happening in future. 

READ MORE: 'Unexploded ordnance' challenge for ScottishPower on North Sea site

The agreed compensation package, which includes direct refunds as well as goodwill payments, means affected customers each received an average of £294. 

All refunds and goodwill payments have been made and there is no need for customers to take any action, Scottish Power said.  

The Herald: ScottishPower has agreed to pay compensation ScottishPower has agreed to pay compensation (Image: PA)

ScottishPower will also pay £1 million to the Energy Industry Voluntary Redress Fund, which benefits charities and community projects that help vulnerable customers with energy-related support. 

Andrew Ward, CEO of ScottishPower’s Customer Business, said: “We’re so sorry that a very small number of our customers were affected by this mistake and faced an increased financial burden – especially during a time when energy prices were reaching an unprecedented high and the government had to step in to provide support. 

“Looking after our customers is at the heart of everything we do and our immediate notification to the regulator, swift corrective action and the compensation package agreed with Ofgem show both how seriously we take this matter and our commitment to making it right.” 

READ MORE: ScottishPower to run UK-wide investment drive from Glasgow

Dan Norton, Ofgem’s Deputy Director for Price Protection, added: “The last few years have been challenging enough for energy customers facing increasing cost of living pressures, without the additional hardship of being overcharged. The price cap is there to protect consumers, and we take seriously any breaches of the safeguards we have put in place. 

“Suppliers must be vigilant and act quickly to resolve billing errors that impact customers. We will continue to closely monitors all suppliers and will hold them to account if they do not meet the standards we set.”