Shell Energy Retail's boss has apologised to customers after Britain's energy regulator ordered the utility to compensate around 12,000 customers it overcharged on default tariffs after a price cap was introduced this year. 

Ofgem said Shell Energy Retail, previously known as First Utility, will pay £200,000 in addition to the refund to its consumer redress fund.

This brings its total payment to £390,000. 

This is the first such action against a company for overcharging since the price cap on default energy bills came into force on January 1 in the UK. 

The price cap was aimed at saving households about £1 billion a year following a government promise to tackle what it had called "rip-off" prices. 

Shell Energy Retail overcharged a sum of £100,737 collectively above the level of the price cap between January and March this year, Ofgem said. 

"We'd like to apologise to all customers who were temporarily out of pocket," Shell Energy Retail's chief executive Colin Crooks said in an e-mail to Reuters. 

Crooks said the company had a small number of customers on fixed-price default tariffs to whom it did not apply the capped rates since most of those customers would have been better off remaining on their existing tariff. 

"However, we recognise that there were some who would have been better off on the capped rates or who suffered a delay in changing their payment method," he added. 

Ofgem said it decided not to take formal enforcement action since the company addressed its failings.