‘Complacent’ power firms may face fines

FINES FOR power firms that fail to restore household electricity supplies within set times are needed to end the “complacency” bosses showed during mass black-outs over Christmas, MPs have said.

Customers should also get far higher compensation payments after suffering much shorter periods without power during extreme weather, they added.

The calls to exert pressure on the sector came in a letter to Energy Secretary Ed Davey from the chairman of the Energy and Climate Change Committee, TimYeo.

Power bosses were given a bruising interrogation when they were summoned before the committee to explain their response to the storms that left thousands of homes without power over the festive period.

“We invite you to consider whether a direct financial penalty should be imposed by Ofgem on companies which fail to restore power to customers within a stated time frame,” MrYeo wrote.

“The complacency displayed by the witnesses who appeared before us convinces us that only a measure of this kind is likely to spur them into action.”

They had shown an “astonishing lack of concern for the plight of their customers”, he said — though he stressed there was no criticism of staff on the ground who worked through the holidays.

More than 150,000 homes were cut off after strong winds, torrential rain and flooding caused damage to power networks, with some left without electricity for up to six days.

In future, customers should be eligible for compensation during extreme weather after 18 or 36 hours, depending on the severity, rather than the present 24 or 48, the committee believes.

And the “grossly inadequate” minimum statutory compensation of £27 should be significantly raised, he said, beyond the doubling of that already introduced by many firms. Ofgem had proposed a £35 payment for domestic and nondomestic customers, with an additional £35 for each further 12 hours up to a cap of £300, MrYeo noted.

However, the committee believes a rate of £75 plus £70 for each further 12 hours up to a cap of £600 — as put forward by Western Power Distribution — was a more appropriate level.

David Smith, chief executive of the Energy Networks Association, told the committee hearing the plan faced technical issues and was “in its early stages”.

During the committee hearing, MPs were told “tried and tested” emergency plans were defeated by the severity of the storms, including stronger-than-expected winds and companies were unable to help each other because they were all stretched to the limits.