Thursday 06 March 2014 9:57 am

Energy companies face Ofgem investigation over Christmas power cuts

Ofgem is set to investigate energy companies UK Power Networks (UKPN) and SSE over their response to the storms that wreaked havoc across the UK over the Christmas period.

The two electricity distribution network operators were found to have been the slowest in responding to customers and in reconnecting their electricity supply.

The energy regulator is also looking to increase payments to customers who have their electricity cut off for an extended period of time during severe weather.

UKPN covers the London region, while SSE Southern regions covers central southern England, including Reading, Slough, Wiltshire and Gloucestershire.

500 SSE and UKPN customers were left without power for over five days. The companies handling of customers enquiries was also found wanting, with one in five callers deciding to hang up before speaking to an advisor.

Around one million customers had their power cut off during the Christmas floods, with 16,000 households going without electricity for over 48 hours.

The regulator will examine whether payments should be increased to those customers who were left without power fora significant period of time. Ofgem has instructed companies to learn the lessons from the storms and report back as to how they intend to improve performance in the future.

As many as 26,000 customers could be entitled to claim £2m in guaranteed standards payments in the aftermath of the storms, with UKPN and SSE projected to make up 26 and 67 per cent of the compensation respectively. SSE and UKPN have already committed themselves to pay an additional £7.5m to affected customers.

Hannah Nixon, senior partner for distribution, commented:

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.

As part of the probe, the watchdog is asking all distribution network operators to review their processes and report back within two months. The investigation will be concluded in July and further action has not been ruled out.

Ofgem’s announcement comes hot on the heels of the Department of Energy and Climate Change’s review into the same issue, although both reports are separate.

The government has outlined a number of measures to improve responsiveness during severe weather conditions, including a three digit number hotline for customers to call during a power disruption.