Power firms tackled by MPs over profits and performance

 

Britain's power distribution chiefs are fuming about the damage to their industry's reputation by the company blamed for blackouts in the South-east over Christmas.

UK Power Networks (UKPN), owned by the Hong Kong tycoon Li Ka-shing's offshore-controlled family businesses, left thousands of customers without electricity on Christmas Day. Many remained in the dark for more than five days while the company struggled to repair storm damage.

As a result, senior managers from across the whole power distribution industry are now being hauled in front of MPs on the Energy Select Committee for what will inevitably prove to be a series of bruising encounters and dismal headlines. Calls for windfall taxes and bonus clawbacks could be in the wind.

No one would go on record ahead of the hearings, but one manager said, on condition of anonymity, that "UKPN's performance has raised a lot of eyebrows throughout the industry. I mean, what were they doing? Now all our reputations are getting tarnished."

Another said: "We're all going to be lumped in together when, in other parts of the country, we [also] had very severe weather but performed well, getting people's power back on within a few hours."

The Independent on Sunday's sister paper, The Independent, last week revealed how UKPN alone made nearly £1bn in underlying profits in its most recent financial year, while paying its chief executive £1.7m. The company may also have funnelled as much as £630m back to its Hong Kong and offshore parent companies in dividends and interest repayments on money they lent UKPN since taking it over in 2010.

Other companies have also channelled hundreds of millions of pounds back to foreign owners. Western Power Distribution, owner of network monopolies in the South-west, South Wales and Midlands, paid dividends of £443.4m to its US parent, PPL, during 2011-2012. SP Distribution and SP Manweb paid £948m in dividends to their Spanish parent, Iberdrola, over the same two years.

Such dividends to overseas companies did not necessarily mean that performance was reduced, however. SP Distribution was commended for the way it coped north of the border. And Western Power Distribution said that, of the 122,000 homes in its regions who suffered power blackouts in the horrendous storms in Devon and Wales, 99.9 per cent were back up and running within 24 hours.

UKPN denied inferences that it had been scrimping on staff, and is likely to repeat those denials to MPs, although accounts show it did reduce staff numbers in 2012. A spokeswoman said the company was investing "close to £600m per annum" in capital investment.

UKPN's chief executive, Basil Scarsella, however, will come under fire about his admission that the company allowed too many staff to be off on holiday over the Christmas break. Rival executives said this was a particularly surprising admission, given that Christmas and the New Year are often stormy periods.

"We knew the weather was going to be coming in and made sure we had enough people working. What was UKPN doing?" asked an executive at a rival firm.

"Now we're all going to be hauled in front of the Select Committee. But it will be pretty obvious when the companies come to give evidence who managed well and who didn't."

MPs will inevitably be asking about how companies can claim to be investing adequately in the network when they are making such vast profits out of ever rising customer bills. Against the backdrop of the price rise row stirred up by Labour leader Ed Miliband's pledge to cap bills, the distributers will face a particularly tough grilling.

The watchdog, Ofgem, will also be grilled on whether it has been tough enough on the local monopoly companies it regulates.

Arts and Entertainment
The Doctor and the Dalek meet
tvReview: Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Arts and Entertainment
books
Sport
Diego Costa
footballEverton 3 Chelsea 6: Diego Costa double has manager purring
Life and Style
3D printed bump keys can access almost any lock
gadgets + techSoftware needs photo of lock and not much more
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
News
i100
Arts and Entertainment
Inside the gallery at Frederick Bremer School in Walthamstow
tvSimon Usborne goes behind the scenes to watch the latest series
Life and Style
Silvia says of her famous creation: 'I never stopped wearing it. Because I like to wear things when they are off the radar'
fashionThe fashion house celebrated fifteen years of the punchy pouch with a weighty tome
Arts and Entertainment
Gregg Wallace in Summer's Supermarket Secrets
tv All of this year's 15 contestants have now been named
News
i100Steve Carell selling chicken, Tina Fey selling saving accounts and Steve Colbert selling, um...
Life and Style
A picture taken on January 12, 2011 shows sex shops at the Paris district of Pigalle.
newsThe industry's trade body issued the moratorium on Friday
Arts and Entertainment
Could we see Iain back in the Bake Off tent next week?
tv Contestant teased Newsnight viewers on potential reappearance
News
i100
News
The slice of Prince Charles and Princess Diana's wedding cake and the original box from 29 July 1981
newsPiece of Charles and Diana's wedding cake sold at auction in US
Voices
The Ukip leader has consistently refused to be drawn on where he would mount an attempt to secure a parliamentary seat
voicesNigel Farage: Those who predicted we would lose momentum heading into the 2015 election are going to have to think again
Arts and Entertainment
Cara Delevingne made her acting debut in Anna Karenina in 2012
film Cara Delevingne 'in talks' to star in Zoolander sequel
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Law Costs

Highly Attractive Salary: Austen Lloyd: BRISTOL - This is a very unusual law c...

Junior VB.NET Application Developer (ASP.NET, SQL, Graduate)

£28000 - £30000 per annum + Benefits + Bonus: Harrington Starr: Junior VB.NET ...

C# .NET Web Developer (ASP.NET, JavaScript, jQuery, XML, XLST)

£40000 - £50000 per annum + Benefits + Bonus: Harrington Starr: C# .NET Web De...

Clinical Negligence Solicitor

Highly Competitive Salary: Austen Lloyd: HAMPSHIRE MARKET TOWN - A highly attr...

Day In a Page

Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

The phoney war is over

Russian troops and armour pour into Ukraine
Potatoes could be off the menu as crop pests threaten UK

Potatoes could be off the menu as crop pests threaten UK

The world’s entire food system is under attack - and Britain is most at risk, according to a new study
Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
From Mozart to Orson Welles: Creative geniuses who peaked too soon

Creative geniuses who peaked too soon

After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
Caught in the crossfire of a cyber Cold War

Caught in the crossfire of a cyber Cold War

Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

Salomé: A head for seduction

Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

British Library celebrates all things Gothic

Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

Is the Hard Rock Café worth fighting for?

The restaurant chain's owners are currently embroiled in a bitter legal dispute
Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

In search of Caribbean soul food

Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
11 best face powders

11 best face powders

Sweep away shiny skin with our pick of the best pressed and loose powder bases
England vs Norway: Roy Hodgson's hands tied by exploding top flight

Roy Hodgson's hands tied by exploding top flight

Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

Di Maria and Ronaldo: A tale of two Manchester United No 7s

They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference