REG - OFGEM - Ofgem publishes Storm Arwen full report

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09/06/2022 08:15

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RNS Number : 2378O  OFGEM  09 June 2022

Ofgem publishes full report following six-month review into networks' response
to Storm Arwen

 

 

·    20 recommendations to ensure customers get a better service when
severe weather strikes

·    Distribution network companies (DNOs) pay out £44million in total
over the storm

 

 

Storm Arwen saw nearly 1 million homes in Britain lose power in November 2021,
with nearly 4,000 homes having to cope in appalling conditions without power
for over a week.

 

Today, 9 June 2022, Ofgem has published its findings
(https://www.ofgem.gov.uk/publications/storm-arwen-report) following a
six-month review launched in December 2021 to establish what went wrong and
what industry needs to change to provide a more effective response to severe
weather events.

 

The review focussed on whether the power outages could have been prevented,
whether correct and timely information was given to customers affected,
whether power was restored quickly enough and how customers were supported
after the storm including the processing of compensation payments.

 

Staff in all affected DNOs worked hard in challenging circumstances to get
customers reconnected, but Ofgem concludes that thousands of customers were
provided with an unacceptable service. This report builds on the initial
findings in the interim report and sets out clear recommendations for
improvement.

 

The main findings of the review are:

 

1.  Some affected customers remained off power for an unacceptable amount of
time, received poor communication from their network operator and compensation
payments took too long.

2.  Whilst companies initiated their emergency plans before the storm hit,
the plans were not sufficient to deal with the scale of damage that resulted
from Storm Arwen.

3.  One DNO, Northern Powergrid (NPg), did not directly contact vulnerable
customers enrolled on its Priority Services Register (PSR) prior to Storm
Arwen. This should have been carried out as part of its planned winter
preparedness campaign.

4.  NPg accepted the performance of its call centre fell below the standards
it should have been able to meet during a severe storm. This could be a
potential breach to licence condition, SLC 8.3(b) & (c), which relates to
the availability and operation of their call centre.

5.  Limited remote monitoring on the lower voltage networks hindered DNOs
from understanding the full scale and complexity of faults, impacting the
number of resources they initially deployed to undertake repairs, restore
power and support customers.

6.  Most network faults during Storm Arwen were caused by strong winds or
trees and branches falling onto power lines. Ofgem additionally found some
correlation between poles that were damaged and their age, although this needs
further investigation.

7.  Customer research and stakeholder feedback told Ofgem that many customers
had to endure a very long wait to have their power restored, had to deal with
poor and sometimes inaccurate communications with the network operator, and
had to endure long delays in receiving compensation, which is not acceptable.

8.  28% of customers were given a restoration time that was not within 24
hours of their actual restoration time, and some affected customers did not
think that the support available was made clear to them.

 

In recognition of this, three DNOs - NPg, SSEN and ENWL - paid nearly
£30million in direct compensation to affected customers after the storms.
These network operators have agreed that they will pay a further £10.3million
in voluntary redress payments to the affected communities through
contributions to community funds and in donations to vulnerability support
charities. Progress against recommendations will be tracked and Ofgem will act
as necessary to ensure compliance.

 

Jonathan Brearley, chief executive of Ofgem, said:

 

"Distribution network companies faced challenging conditions in the aftermath
of Storm Arwen, and I pay tribute to the many colleagues in those companies
who supported customers and worked to get them back on power as quickly as
possible. However, it was unacceptable that nearly 4,000 homes in parts of
England and Scotland were off power for over a week, often without accurate
information as to when power would be restored.

 

"Network companies need to do better, not just to prevent power disruptions,
but to ensure that when power is off, they work smarter to get people back on
power quicker, and keep customers informed with accurate and timely
information. This is the very least customers should be able to expect.

 

"The frequency of extreme weather events is only set to increase so it is
really important that industry, and those involved more widely, learn from
Storm Arwen to better respond in future."

 

The key recommendations are:

 

1.  DNOs should submit their winter preparedness plans to Ofgem so the
regulator can be assured that DNOs have taken the necessary steps to ensure
that all customers, especially vulnerable customers, can be supported
effectively during power disruptions.

2.  DNOs should stress test their websites and call centres to ensure
adequate capacity during severe weather events. Additional reporting metrics
for communication channels will fit within the next RIIO-ED2 price control
settlement that will be determined this year.

3.  DNOs to develop more robust mechanisms to enable the delivery of
compensation payments at scale, enabling timely and accurate compensation to
those eligible.

4.  Ofgem will review the Guaranteed Standard of Performance (GSoP) for
severe weather to identify amendments that should be made to better reflect
the impact of extended power cuts. And in the meantime, we recommend DNOs
should voluntarily lift the cap for future storms as they did during Storm
Arwen.

5.  Current network infrastructure and guidance including vegetation
management and overhead line designs should be reviewed to increase network
resilience to severe weather events.

6.  A standard-based approach to organisational resilience should be
considered by E3C to improve the speed of customer restoration during severe
weather events. It is noted that current standards and guidance that support
the DNOs in providing a reliable network are more focussed on preventing
outages rather than how to respond during a power outage.

 

 

Notes to editors

 

DNOs are responsible for converting high voltage electricity from the
transmission network into a lower voltage and for delivering it to homes and
businesses.

 

Compensation and redress payments made by DNOs:

 

 DNO        Mandatory compensation                                   Alternative action    Total

                                        Voluntary compensation
 ENWL       £2,058,201                  £2,089,645.00                £290,000              £4,437,846
 NPg        £9,790,000                  £2,600,000.00                £7,690,000            £20,080,000
 WPD        £203,735                                                                       £203,735
 UKPN       £8,225                                                                         £8,225
 SPN        £2,910,000                  £1,327,200.00                                      £4,237,200
 SSEN       £8,300,000                  £4,800,000.00                £2,300,000            £15,400,000
 Total      £23,270,161                 £10,816,845                  £10,280,000           £44,367,006

 

·    Mandatory compensation: the total mandatory payments made to
consumers disconnected during Storm Arwen by DNOs as required by the
Guaranteed Standards
https://www.ofgem.gov.uk/sites/default/files/docs/2016/12/ofg581_guarantee_standards_booklet_updated_dec16.pdf
(https://www.ofgem.gov.uk/sites/default/files/docs/2016/12/ofg581_guarantee_standards_booklet_updated_dec16.pdf)
 

·    Voluntary compensation: the additional payments made by DNOs over and
above their mandatory payments on a voluntary basis. This included, but was
not limited to, the lifting of the maximum payment being £700.

·    Alternative action: additional voluntary payments by three DNOs
agreed with Ofgem in recognition of the poor experience some customers
endured.

 

The report (https://www.ofgem.gov.uk/publications/storm-arwen-report) is
complementary to a report also published today by the Energy Emergencies
Executive Committee (E3C) commissioned by the Secretary of State for BEIS. E3C
is made up of government and industry to ensure a joined-up approach to
emergency response and recovery. The E3C will be responsible for ensuring the
recommendations in this Ofgem commissioned review and report are implemented.

 

The current compensation system is as follows:

 

·    £70 compensation is available after the first 48 hours, and then
£70 for every 12 hours thereafter without power. This is capped at £700.
During Storm Arwen the DNOs agreed to lift the £700 cap so that those without
power for more than 6.5 days received additional compensation. During Storm
Arwen, 82% of customers had power restored within 24 hours.

·    The payments set out above exclude additional shareholder funded
investments that will be made to increase levels of network resilience.

·    They also exclude costs relating to network repairs or additional
welfare payments made by all affected DNOs, including the costs relating to
alternative accommodation, the provision of meals and other direct support.

 

 

Media enquiries

 

Please email press@ofgem.gov.uk or call 0203 263 9996.

 

General enquiries (non-media)

 

If you are an energy customer looking for help and advice, including
complaints about energy firms, please see our Household gas and electricity
guide. Citizens Advice also provide a free, impartial helpline service across
a range of issues on 0808 223 1133.

We also regularly share news and post general advice to help consumers get the
most out of their energy services via our @Ofgem twitter and Facebook pages.
If you have an enquiry or complaint relating to Ofgem's policies or functions,
contact us at consumeraffairs@ofgem.gov.uk or on 020 7901 7295.

 

For all other non-media related enquiries, please visit our Contact us page
(https://www.ofgem.gov.uk/about-us/contact-us) .

 

About Ofgem

 

Ofgem is Britain's independent energy regulator. Our role is to protect
consumers now and in the future by working to deliver a greener, fairer energy
system. We do this by:

 

·    Working with Government, industry and consumer groups to deliver a
net zero economy at the lowest cost to consumers.

·    Stamping out sharp and bad practice, ensuring fair treatment for all
consumers, especially the vulnerable.

·    Enabling competition and innovation, which drives down prices and
results in new products and services for consumers.

 

For facts, figures and information about Ofgem's work, see  Energy facts and
figures (https://www.ofgem.gov.uk/news-media/energy-market-facts-figures)  or
visit the Ofgem Data Portal (https://www.ofgem.gov.uk/data-portal/overview)
.

 

For energy insights and updates straight to your inbox from Ofgem, please
subscribe (https://www.ofgem.gov.uk/subscribe-our-news-and-communications) .

 

Follow us on Twitter @ofgem (https://twitter.com/ofgem) , LinkedIn
(https://www.linkedin.com/company/ofgem)  and Facebook
(https://www.facebook.com/ofgem) .

 

 

 

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