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Ofgem to Make Network Companies Increase Power Cut Compensation

02 Apr 2014

Ofgem is proposing to make Distribution Network Operators (DNOs) double the minimum financial payments they make for customers who face long power cuts in severe weather.

The proposed reforms to the Guaranteed Standards in severe weather would mean that:

  • DNOs would have to double payments made to customers to £70 if they fail to meet the minimum levels of service
  • Cap for payments made to customers would increase substantially, from current £216 to £700
  • Payments for customers are made automatically wherever possible

Ofgem has already introduced a major change under normal weather conditions, with the contravention time reduced from 18 hours down to 12 hours as part of our RIIO-ED1 price control. Increasing the payments for customers affected during severe weather conditions would further strengthen the incentives for the companies to act quickly and reconnect customers as soon as possible.

Guaranteed Standards, set by Ofgem, are the absolute minimum levels of service customers should expect from DNOs. If a DNO fails to meet these Standards, the affected customers are entitled to a payment. The companies are able to provide additional payments to consumers affected by power cuts.

Hannah Nixon, Senior Partner for Distribution said: “Many parts of Britain have seen some extreme weather conditions over the last few months and Ofgem has been proactively looking at ways to help consumers who face disruption to their energy supply in these situations.

“We are committed to ensuring that consumers are provided with a reliable electricity service. During the 2013 Christmas storms, 95% of customers who faced power cuts were reconnected within 24 hours, but we remain concerned about the 5% whose supplies were off for an extended period. Increasing the financial payments would send a strong message to the network companies that they need to do all that they can to reconnect all customers as fast as possible.”

The consultation will be open for eight weeks and interested parties are invited to share their views on the proposed changes. Ofgem will publish its decision by 1 July 2014.

Story appears courtesy of Ofgem