Swindon-based energy giant Npower has been ordered to pay £26m after it sent out inaccurate bills and failed to deal with complaints correctly.
Energy watchdog Ofgem said gas and electricity supplier Npower, which employs more than 1,000 people at its Windmill Hill office, was being fined for “not treating its customers fairly”. 
The settlement is the largest yet agreed between Ofgem and one of the UK’s ‘big six’ energy suppliers.
Ofgem said an IT system installed by Npower in 2011 resulted in bills being sent out late to more than half a million customers between September 2013 and December 2014.
The firm, which has 5m residential customers across the UK, also sent some customers inaccurate bills “with little or no detail on how these were calculated”.
Two million Npower customers complained to Ofgem and organisations such as Citizens Advice as well as their MPs.
However, Ofgem said: “Npower often failed to resolve these issues promptly, pursued debts which were in dispute and failed to keep its own commitments to customers on billing. This caused significant distress and worry for many.”
In some cases customers did not receive bills for more than a year. And while UK billing rules that customers should not have to pay for energy used more than a year earlier, Npower still charged them.
Ofgem said the £26m would be divided between some of the worst affected customers and charity.
Ofgem chief executive Dermot Nolan said: “Npower failed its customers. Not only have its billing and complaint handling procedures been chaotic, it treated many of its customers poorly, which is completely unacceptable. 
“Npower’s management failed to act quickly enough to protect its customers when things went wrong with changes to its IT system.”
The regulator said it had agreed targets with Npower for it to improve its billing and complaints handling. The company will have to stop all UK sales and advertising if it fails to meet the targets.
Npower managing director of domestic markets Simon Stacey said: “The last few years, since we changed the systems that support our domestic business, have been very disappointing for our customers – and for Npower.
“We are very sorry about what has happened and that is why we have agreed this significant package of customer redress.”
He said the company had reduced complaints by almost 70% since the beginning of the year.
The Swindon office, pictured above, of Npower, which is owned by German energy group RWE, is home to its retail energy management, communications, procurement, property sustainability, finance, Human Resources (HR), compliance, legal and executive teams.
