Power firms fined over connections

Three power grid firms have been fined a combined £1 million for failing to meet the three-month deadline for customer connections, the energy watchdog announced today.

Ofgem said Scottish Hydro Electric Power Distribution (SHEPD), which is owned by Scottish and Southern Energy, and E.ON-owned Central Networks will pay the largest of the three fines for taking too long to connect customers and for not having systems in place to monitor their service.

SHEPD is being fined £500,000, while Central Networks will pay £400,000 and Electricity North West will pay £100,000 for its breach of the connection deadline.

These firms connect a range of customers to the power grid, such as housing developers and wind farms.

They hold a monopoly in their areas and customers are therefore reliant on them providing a good connection service, according to Ofgem.

Stuart Cook, senior partner of smarter grids and governance at Ofgem, said: "Today's penalty sends a clear message that the companies must meet the standards set by Ofgem for connection services.

"We recognise that all three companies have taken steps to improve their connection services, in some cases prior to the commencement of the investigation, but they should have taken this action sooner."

Ofgem added the fines have been reduced in recognition of co-operation by the firms.

Ofgem said it was particularly concerned that SHEPD failed to demonstrate full compliance until the second half of 2009.

The regulator set up compensation arrangements for late connections in October to improve customer service among power grid firms.

Customers can now claim back up to £200 per working day for connection delays.

Ofgem previously fined utility giant EDF Energy Networks £2 million for connection breaches in July 2009.

In that case, Ofgem found that EDF Energy Networks failed to meet the three-month deadline in more than 100 cases since 2006.

Ofgem said today: "Given the need to invest £200 billion in our energy industry in the next 10 years, more than £30 billion of that in networks, it is vital that customers get prompt connections, especially given the need to expand local renewable generation schemes to deliver secure and sustainable energy supplies for consumers."