Financial News

  • 22 January 2014, 15:14

Energy Bosses 'Utterly Complacent' Over Storms

Energy bosses have been accused of "utter complacency" over their response to the Christmas storms that left hundreds of thousands without power.

The heads of the six companies, responsible for the networks which provide power to the UK's homes, were appearing beforeMPson the House of Commons Energy Select Committee.

They said they were pleased with the response to the crisis, which saw some homes without power for up to five days, effectively claiming that customers were lucky it had not taken longer to restore electricity to homes.

In addition they were unable to tellMPshow many people were affected, even three weeks after the event.

The committee accused them of having exploited their "privileged monopoly position" and of a lack of sympathy for families who were left without electricity on Christmas Day.

Conservative MP Tim Yeo lambasted them saying: "I've heard nothing at all this morning which reassures me that you are taking this problem seriously enough to deal with the concerns of millions of your customers.

"There is no sense of urgency in what you said about any plans to step up your capacity to respond to severe weather even though we now have quite clear warnings that extreme events are likely to take place more frequently in future."

In addition they cast doubt on Energy Secretary Ed Davey's pledge to introduce a 999-style emergency blackout telephone number for households confused over whom to call in a crisis.

Mr Davey made the claim on January 8 following a meeting with the six energy network company bosses, however, when questioned David Smith, chief executive of the Energy Networks Association, said they were "working on it".

Mr Yeo accused the firms of managing to "make the Secretary of State look ridiculous in his claim that there is going to be a three digit number that customers can use".

He asked Mr Smith if he had informed Mr Davey's office that the introduction of an emergency number were "complete nonsense" and was told: "We had the conversation with the Secretary of State and one of the things that we were very clear on was we need to do some more work, we need to get the final bits and pieces in place, and that was the key point."

Mark Mathieson, managing director of SSE's electricity networks, told the committee: "It was just the impact of the event. It was a massive event. Certainly we haven't seen damage like this in the South back from the early 90s and even back to the great storm of 1987.

"I think the one thing I would say, and I've been in this industry for 25 years, we as an industry clean these events up much quicker than we used to. But we also recognise the impact that has on customers.

"We are sorry and I did go out to communicate with customers that we were sorry that they were off."

Basil Scarsella, the chief executive of UK Power Networks, said that they had been prepared for the storms but that the weather forecast "escalated significantly".

He said that on Friday they had forecast 40-50mph winds for Monday but by Sunday that has increased to 70-80mph.

The bosses were also questioned over the levels of compensation offered to customers who had gone without power.

They said they had doubled the levels of compensation to households who had been without power.

However, they were given examples where payouts were being questioned where homes had not met the criteria of 24 hours without power because electricity had been restored for five minutes during the day.

There was widespread anger about the delays in restoring power during the prolonged period of flooding over Christmas.

The outages caused significant delays at Gatwick airport with hundreds of passengers affected and flights cancelled.

David Cameron was memorably confronted by angry resident Erica Olivares during a visit to the village of Yalding in Kent on December 27.

Mr Yeo concluded the committee hearing by telling the six men: "I have to conclude that you are exploiting your privileged monopoly position and you have displayed a neglect of your customers which I personally find absolutely astonishing."

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