UK Grid Operator Fined for Poor Service
UK grid operator Cadent will have to pay a record £24mn ($30mn) in penalties and separately set up a £20mn fund in order to settle regulatory claims that it had not met its licence conditions over a number of years, it said May 22. The low-pressure pipeline operator, serving 11mn customers, admitted to very low standards of service, including keeping customers off the grid while maintenance and repairs took place – sometimes for weeks on end – without paying them compensation.
Cadent also had no records of the 775 high rise blocks of flats, which meant they were not part of its regular inspection or maintenance programme. This only came to light in the wake of the Grenfell Tower disaster of 2017. Ofgem opened an investigation into Cadent’s record-keeping in 2018.
Cadent CEO Steve Hurrell said the company aimed "to put customers' needs at the heart of everything we do, and we acknowledge that in the past we have fallen short of customer expectations and the higher standards we have now set ourselves; for this we are sorry.... While Cadent is a relatively new business, some of its record keeping processes and practices go back many decades, and a number of the issues we are addressing today are a legacy of that past."
Ofgem CEO Dermot Nolan said: "Cadent acknowledges that it failed these customers by leaving many without gas for longer than necessary, failing to properly compensate some of those affected and not having the proper systems in place to keep records of all the high rise blocks of flats it supplies.
“Ofgem has worked with the company, which is under new ownership and has given commitment to improve its operations to put customers at the heart of the business, to help it address its failings and prevent further harm to customers’ interests.
“Cadent has also agreed to make a significant financial contribution to customers as redress in recognition of its past failings. This is a move we welcome.”
Cadent is the operator of four distribution companies that a consortium led by Macquarie bought from National Grid in 2017, and Grid still owns 39%. Grid said last year that it expected to complete the sale of that stake by the middle of this year. Cadent told NGW that it would pay the settlement costs, not Grid. It added that it was a case of 'unknown unknowns'. "This issue goes back decades and some buildings we may never had the records for, because at the time surveys were not necessary," the company said.