Financial News

  • 7 March 2014, 8:28

Christmas Storms Compensation Could Be Raised

The energy regulator may recommend increased compensation payments for homes left in the dark for extended periods after the Christmas storms.

Ofgem has confirmed an investigation into the responses from UK Power Networks (UKPN) and SSE, compared with other Distribution Network Operators, when the bad weather struck.

The watchdog threatened possible fines and said additional payments for victims of poor service could be ordered - on top of the £7.5m already pledged by UKPN and SSE.

Ofgem said that while one million customers were without power for at least three minutes after the storms, 95% of them were reconnected within 24 hours.

Approximately 16,000 households suffered lengthy cuts of over 48 hours but of these more than 500 premises in the UKPN and SSE Southern regions were without supply for over five days.

The watchdog added: "There was also a lack of consistency when it came to handling customer enquiries.

"One in five callers in UKPN and SSE Southern regions decided to hang up before speaking to an adviser whilst Western Power Distribution (WPD) answered calls almost immediately."

The two companies at the centre of the inquiry have been ordered to report back to Ofgem on how they will improve their performance in the future at the same time as their responses are investigated.

The Government had called on the distributors to cancel Christmas holidays at the height of the crisis, amid suggestions they were unable to cope with the scale of the damage to supplies because of the festive season.

Basil Scarsella, chief executive of UKPN which owns electricity lines and cables in London, the South East and east of England, has already admitted it was not prepared for the storm and too many staff were on holiday.

Hannah Nixon, Senior Partner for Distribution at Ofgem said: "Being without electricity is difficult for customers at the best of times, let alone during a holiday period.

"Whilst we recognise the hard work of the DNOs' operational staff during the severe weather over Christmas 2013, we are very concerned with the variations in the effect of the storms on customers in different areas.

"Our principal duty is to protect the interest of consumers. We will be looking at increasing guaranteed standards payments during severe weather.

"If our further investigation into the performance of UKPN and SSE during the 2013 Christmas storms suggests that these companies have breached their licence conditions, we will undertake enforcement action that could result in a financial penalty."

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