UK energy regulator Ofgem has sent a warning signal to energy companies that poor responses to outages will be punished as it secures a total of GBP8 million in compensation from SSE and UK Power Network (UKPN) following the storms in south England during Christmas 2013.
Ofgem announced this week it had secured an additional GBP3.3 million from SSE and UKPN which will be paid as donations to organisations like the British Red Cross that play a role in helping customers during power cuts and severe weather.
This follows GBP4.7 million already paid out to consumers under the guaranteed standards and in goodwill payments. The total of GBP8 million is five times more than the minimum required under the current standards payments structure.
Customers without power
The service areas of SSE and UKPN were most badly affected during the storms impacting a quarter of a million customers on their networks. Although between them they restored power to over 95 per cent of customers within 48 hours, almost 16,000 customers remained affected for more than 48 hours.
The regulator’s investigation found that the energy companies could have done more to restore power to customers and communicated better about what was happening.
Maxine Frerk, senior partner for distribution at Ofgem, said: “A power cut at Christmas time is the last thing anyone needs.
“While we recognise the hard work of the companies and their staff who were out working to reconnect customers during the severe weather, the companies could have done more to plan for the weather and keep customers informed. This is why we have secured an additional £3.3 million, bringing the total payout to £8 million.”
Increasing minimum payments
Ofgem has also confirmed that it will double the guaranteed standards payments made to customers who face long power cuts in severe weather.
These rulings, which will come into force in April 2015, will increase the minimum financial payment from GBP27 to GBP70 if consumers are without power for at least 24 hours during a severe weather event. The cap for payments has also increased from GBP216 to GBP700 and energy companies must make automatic payments when possible.
Ms Frerk said: “Ofgem is constantly striving to drive up standards for customers. That is why we have more than doubled the payouts that firms will have to pay if customers are without power during severe weather events.
She added: “Network companies need to learn the lessons of last winter as a repeat performance will trigger further action from Ofgem.”