Energy Back-Billing: Your Rights Over 12 Months

What Is Energy Back-Billing?

Back-billing occurs when your energy supplier claims you have underpaid for past months, often because the meter was estimated incorrectly or readings were not taken. The supplier sends a demand for the shortfall, sometimes dating back years. Under Ofgem's strict rules, this practice is limited to protect consumers from unexpected large bills.

The law is clear: suppliers must follow the 12-month rule. Any bill older than 12 months cannot be recovered, even if the supplier can prove you owed it.

The 12-Month Back-Billing Rule

Ofgem's Back Billing Code (2018) states that suppliers cannot back-bill customers for more than 12 months. This applies to most domestic customers on standard variable or fixed-rate tariffs. The 12-month period runs from the date the supplier discovered the undercharge or meter error, not from the original billing date. If your supplier served a back-bill claim 24 months after the period you allegedly underpaid, the claim is invalid. You can refuse to pay and complain to the Energy Ombudsman.

Standard Licence Condition 21B

Ofgem's Standard Licence Condition 21B (SLC 21B) requires suppliers to back-bill within 12 months for domestic customers unless the account was estimated for the entire 12-month period. If the supplier cannot prove they issued estimated bills for the full period without your actual meter readings, they cannot recover charges older than 12 months. This is the legal protection all domestic customers have.

Step-by-Step: How to Challenge a Back-Bill Claim

1. Check the dates: Look at the back-bill demand letter. Find the date it was issued and the dates of the bills being claimed. Calculate whether the oldest bill is more than 12 months before the demand date.
2. Request the supplier's evidence: Write to the supplier asking them to prove: (1) when they discovered the undercharge, (2) whether they issued estimated bills for the entire period, (3) the meter readings they used to calculate the claim, and (4) why they are claiming bills older than 12 months.
3. Check meter history: Ask for your full meter reading history. If it shows actual meter readings were available, the supplier cannot claim they had to estimate.
4. Calculate the 12-month window: Work out exactly what bills fall within 12 months of the demand date. Bills outside this window cannot be claimed.
5. Write a formal dispute: Send a letter to the supplier (keep a copy) disputing the claim on the grounds that: (1) bills exceed the 12-month rule under SLC 21B, (2) the supplier issued estimated bills without actual readings, or (3) the undercharge was not discovered within 12 months of the demand.
6. If refused, escalate to Energy Ombudsman: File a complaint with the Energy Ombudsman (free service). Reference the 12-month rule and SLC 21B. The Ombudsman will uphold your complaint if the claim exceeds 12 months.

When Suppliers Cannot Back-Bill

Suppliers cannot back-bill if: (1) more than 12 months have passed since they discovered the undercharge, (2) the account was estimated for the entire 12-month period without actual readings, (3) you were not on the account during the claimed period, or (4) the claim relates to estimated bills they should have corrected with meter readings. If any of these apply, refuse payment and make a complaint.

When to Seek Help from the Energy Ombudsman

If your supplier refuses to withdraw the back-bill claim and you believe it breaches the 12-month rule, contact the Energy Ombudsman. This is a free, independent service that can force suppliers to cancel unjust claims. The Ombudsman takes the 12-month rule seriously and regularly rules in favour of consumers when suppliers exceed it. You can also request compensation for the distress caused by the unfair demand.