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Britons could see around 1.4 billion pounds returned under energy bill plans

·1-min read
FILE PHOTO: The sun rises behind electricity pylons near Chester

LONDON (Reuters) - Britons could see around 1.4 billion pounds ($1.9 billion) of their energy payments returned under new proposals from regulator Ofgem that would limit the amount of credit suppliers can hold onto.

Typically, households pay fixed monthly direct debits for their energy supply, with credit built up over the summer months when consumption is lower and then run down in the winter when usage is higher.

"These new proposals would ensure that suppliers are not holding onto more of customers’ money than absolutely necessary, potentially returning millions of pounds of customers’ money," Jonathan Brearley, chief executive of Ofgem, said in a statement.

An auto-refund policy would mean credit in customers' accounts would be returned, resetting the accounts to zero on the anniversary of when the contract started, Ofgem said.

As much as 1.4 billion pounds was held in surplus credit balances in October 2018, according to Ofgem's latest data, which under the new proposals would equate to around 65 pounds per household on average being returned.

A consultation on the plan was announced on Wednesday which will run until May 12, 2021.

If confirmed the new measure would be rolled out from 2022.

(Reporting by Susanna Twidale. Editing by Mark Potter)