Offgem to penalize failing electricity distributors

Customers whose electricity supply is cut off more frequently than any others are to receive special protection under preliminary proposals put forward by UK energy regulator Ofgem Tuesday.

Under the electricity distribution price controls set in April 2000, Ofgem identified the need to introduce new standards of performance aimed at protecting the interests of the ‘worst served’ customers by specifying a maximum number of interruptions that they should face in any one year.

These new standards will also specify what compensation customers should receive if these standards are not met -and the penalties companies may subsequently face.

The ‘worst served’ customers tend to be those living in remote and rural areas or those whose local distribution network is causing particular problems.

Ofgem’s Technical Director, John Scott, said: “The need for these measures was flagged up in the April 2000 price control for electricity distribution companies and they represent a totally new concept aimed at providing specific help and redress for those customers most affected by interruptions in their electricity supply.”

“However, there are many issues that need to addressed in developing the proposals and there are conflicting pressures that also need to be considered, for example how we define an interruption and the maximum number of interruptions that are allowed in any one year. One of the main tasks will be to identify who exactly are the ‘worst served’ customers.”

Ofgem has suggested that customers who suffer more than three interruptions of more than three hours duration should receive compensation of about ௿½50 – but how the standard might apply is subject to full consultation.

These measures will work alongside Ofgem’s Information and Incentives Project (IIP) which is aimed at strengthening the financial incentives on electricity distribution companies to deliver improvements in the quality of service they provide customers.

It will provide incentives relating to the number of interruptions to customer electricity supplies generally, the duration of these interruptions and the speed and quality in handling telephone responses.

Ofgem issued a consultation document today and views are invited on these preliminary proposals by Friday 7 September. These new standards will be introduced in April 2002.

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