Ofgem orders SSE and UKPN to pay extra £3.3m in power cut compensation

Ofgem to raise the minimum payout from £27 to £70 for customers who go 24 hours without power

Two energy giants have been forced to pay an extra £3.3 million over the prolonged power cuts that affected nearly one million homes following last Christmas’s storms.

Electricity network providers SSE and UK Power Networks, who have already paid out £4.7 million in compensation over the problems, were ordered to make the extra payment by Ofgem following  an investigation.

The energy watchdog concluded that SSE and UKPN “could have done more to get customers reconnected faster and to keep them better updated on what was happening.

Ofgem also announced today that it was raising the minimum payout from £27 to £70 for customers who go 24 hours without power, with the cap rising to £700 from £216.

SSE and UKPN are two of a handful of operators which take power  from National Grid’s network and deliver it to households through their local network.

Britain experienced severe storms over Christmas with SSE and UKPN customers bearing the brunt of the weather — around 16,000 of their customers were left without power for more than 48 hours.

Ofgem said the two companies recognised they could have done more and have agreed to donate  £3.3 million to organisations such as the British Red Cross.

“A power cut at Christmas is the last thing anyone needs, said Ofgem’s Maxine Frerk.

“While we recognise the hard work of the companies and their staff who were out working to reconnect customers during severe weather, the companies could have done more to plane for the weather and kept customers informed.”

The payouts were announced as the Competition and Markets Authority separately raised concerns that the energy market was being hurt by opaque pricing, the dominance of large utilities which both generate and supply energy and an uncompetitive retail market.

The CMA aired its concerns as it revealed the scope of an 18-month investigation into the energy sector, which is due to be completed at the end of next year.

“We are looking to identify the underlying causes, at both wholesale and retail level, which could be leading to the widespread concerns that have surrounded this market in recent years — including rising energy bills, service quality, profitability and uncertainty over future investment,” said Roger Witcomb, chairman of the Energy Market Investigation Group.

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