AN energy consultancy is repaying a supplier £7.6m following lower-than-expected usage levels.

Utilitywise says the move comes after a client discovered “apparent material levels of under-consumption in certain contracts”.

However, officials at Utilitywise, based in North Tyneside, yesterday played down any long-term impact on the business’ future, adding they believe it will still receive some cash back from the client, referred to only as an energy company, at the end of its contracts.

According to the firm, the energy company understands consumption levels “have been determined to be, on average, significantly lower than initially expected at the inception of the contracts.”

It added about £5.7m of the claim relates to contracts that started before September 2016, with the majority linked to the period from January 2015 to August 2016.

Brendan Flattery, chief executive, said the bulk of the contracts in question are due to end in 2020 and 2021, whereupon the final value of commissions due to Utilitywise, which helps organisations manage water bills, as well as gas and electric tariffs, will be determined and the final cash position between the two parties settled.

Accordingly, he added the group will recognise an accounting charge for the full potential impact, which is estimated at being £11.2m.

Mr Flattery said: “We have been working hard in terms of preparing Utilitywise for its next phase of growth and part of this process has been increasing the transparency of the balance sheet.

“With an extensive portfolio of services in place and a focus on providing a great customer experience, we have a strong platform for continued growth.

“I’m confident the risk of similar issues with other suppliers is minimal.”

He added the £7.6m will be repaid in stages, with a £4.8m sum this year followed by smaller amounts until December 2020.

Utilitywise’s services include the SmartDash and Wiselife Connect software, which help customers view gas, power and water use and remotely control electrical devices, respectively.