Financial News

  • 6 January 2014, 4:31

Xmas Storms: Ofgem May Fine Power Networks

The energy regulator has threatened to impose fines on power line operators after the Christmas storms which left hundreds of thousands without electricity.

Ian Marlee, senior partner at Ofgem, told Sky News that while praise was due to power networks which reacted swiftly in horrendous weather conditions, it remained to be seen whether reconnection delays of up to five days were justified.

More than 150,000 homes were cut off after strong winds, torrential rain and flooding caused damage and company bosses are due to be called before a committee ofMPs to explain their response.

The Government 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.

On a visit to Yalding in Kent to see villagers affected by flooding and thank rescuers, the Prime Minister was confronted by one resident who claimed they were abandoned.

Basil Scarsella, chief executive of UK Power Networks 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.

The company has pledged to increase payments for 48 to 60-hour outages from 27 to 75 for those affected on Christmas Day as "a gesture of goodwill".

Additional payments will be made to customers who have been without electricity for longer than that time - up to a maximum of 432.

Mr Marlee said today of the distributors: "They had learned the lessons of the past, for example in offering Christmas meals out to people through mobile catering, and working together with other companies.

"But there are still some questions remaining: Were they sufficiently well prepared, did they actually reconnect people fast enough and indeed was the information they provided sufficient?

"We will get reports back from the companies and clearly we will look at that and if there is regulatory action that needs to be taken then we will do so."

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