E.ON to compensate UK customers after gas meter mix-up

(Adds quotes from SSE (LSE: SSE.L - news) , EDF Energy, Scottish Power)

By Nerijus Adomaitis

Aug 15 (Reuters) - British gas suppliers may have to compensate hundreds of their customers who were overcharged because of a mix-up involving metric and imperial measurements, with one having paid too much for 15 years.

German utility E.ON, the first utility to admit the mistake, said it would compensate around 350 residential and business consumers in Britain. The company confirmed there was one example which had gone on for 15 years, but said most involved shorter periods.

"Each case is being dealt with on an individual basis," E.ON spokesman Scott Somerville said, declining to say how much the problems would cost the company.

Rivals Scottish Power, EDF Energy and SSE (Amsterdam: UW8.AS - news) also indicated that small numbers of their customers could have been affected.

"It was generally because customers with a metric meter had been registered as having an imperial meter or vice versa," E.ON said in a statement.

"This mistake meant ...customers either being overcharged or undercharged."

The errors further dent the image of the supply industry after a two-year investigation found that providers have overcharged customers because of uncompetitive standard energy tariffs.

E.ON said it would compensate around 350 customers in full and pay interest. About 250 households who had been undercharged would not be asked to pay anything.

"It's good to see that E.ON is doing the right and fair thing, by coming forward and compensating its affected customers, and other suppliers should follow suit," said Margot James, the minister responsible for small business.

UK energy market regulator Ofgem said the number of customers affected was "very small". Ofgem has asked other gas suppliers to check their systems and to report back by the end of the week.

There were around 21 million domestic gas consumers in Britain in March, and E.ON had 11 percent retail market share, Ofgem's data showed.

"It's an industry wide issue," said an official at one British utility.

Scottish Power, owned by Spain's Iberdrola (Amsterdam: ID6.AS - news) , said the company believed about 100 customers out of 2.2 million could be affected.

"We are now in the process of directly contacting these customers, and ensuring that any overpayments can be corrected," a spokesman for the utility said.

French-owned EDF Energy, another gas supplier, said it has been working with Ofgem and the industry to agree a consistent approach to resolve the issue "for the very small number of affected gas customers".

SSE said its initial analysis suggested only around 0.01 percent of its gas customers were affected. (Reporting by Nerijus Adomaitis; Editing by Keith Weir)