The UK’s biggest electricity distribution business has agreed to pay £14.9m after its support for vulnerable customers during power cuts was deemed “totally unacceptable”.
The energy regulator said National Grid’s Western Power Distribution (WPD) did not provide proper support to 1.7 million customers during the outages. An Ofgem investigation, launched in 2020, found that WPD had failed customers in a number of areas including not carrying out criminal record checks for all staff visiting customers’ homes.
WPD also failed to swiftly notify and update some of those affected by the outages about when power would be restored and what assistance was available.
Network companies have a duty to provide extra support to about 6 million UK households in vulnerable circumstances and on a register for priority services. The investigation found WPD left new vulnerable customers waiting for information on how to prepare for power cuts for up to a year. The problem persisted for five years, Ofgem said.
The settlement has been announced at a point when energy companies’ treatment of customers is in the spotlight amid soaring household bills. On Tuesday, the business secretary, Kwasi Kwarteng, gave energy firms three weeks to justify hikes to direct debit payments.
Cathryn Scott, the director of enforcement and emerging issues at Ofgem, said: “WPD did not meet all of its obligations to provide additional support to some of its most vulnerable customers to safeguard their wellbeing. In our view it also took too long to put this right. This is totally unacceptable.”
WPD, which is the distribution network operator for south Wales, the Midlands and the south-west of England, was bought by National Grid last year from the US company PPL Corporation in a £7.8bn deal.
The breaches happened between March 2015 and July 2021. Network firms are required to give adequate and prompt information to customers registered for priority assistance. The rules are designed to offer protection so those customers can take measures to keep themselves safe during unplanned power cuts.
Companies may also be required to provide mobile power generators, hot meals and drinks, alternative accommodation and on-site welfare units.
Ofgem said WPD had since sought to address all areas of concern, changing its policies, procedures and processes. The settlement funds will be paid into Ofgem’s redress fund, which is designed to benefit customers.
WPD said it was “very sorry for any occasions when our services fell below Ofgem’s requirements”, adding: “We were disappointed that, following initial engagement, Ofgem chose to pursue enforcement action against WPD and not enable the issues to be addressed via constructive engagement.”
The government said last month that the job of keeping the UK’s electricity and gas flowing would be returned to public control by 2024 under plans for the effective nationalisation of a division of National Grid. A new public body, the Future System Operator, will be created in the process.