The gas operator Cadent has agreed to pay £24 million and establish a £20 million community fund after an intervention from Ofgem.
The regulator launched an investigation into the operator’s record-keeping in 2018 after it became aware that Cadent was increasingly leaving customers in blocks of flats without gas for longer than necessary.
Cadent reported to Ofgem earlier this year that it failed to pay compensation over a six-year period to a possible 12,000 affected residents left without gas for more than 24 hours as required.
And last year, Cadent reported to Ofgem that it had no records of gas pipes in many high-rise blocks in its London network.
The gas operator has admitted these failings to Ofgem, agreed to rectify the issues and submitted improvement plans for dealing with interruptions and record keeping.
The regulator said today (22 May) it has now closed its investigation and will not take further action over interruptions and delayed compensation payments.
While Cadent has acknowledged its responsibility to customers and agreed to pay a total of £24 million.
In addition, it is setting up a £20 million community fund to support customers in vulnerable circumstances.
“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,” said Ofgem’s chief executive, Dermot Nolan.
“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’s chief executive officer, Steve Hurrell, said: “We aim 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.
“It is important within the energy sector to have a strong regulator to ensure customer interests are protected and we are working closely with Ofgem to restore confidence in us and build trust in our future plans.”
Commenting on the announcement, Citizens Advice chief executive Gillian Guy, said: “Our research shows that in the last three years, households have missed out on £5.1 million of compensation for customer service failures by network companies. We believe that when these companies don’t deliver the right levels of service, compensation should be automatic.
“The setting up of a community fund to support consumers in vulnerable circumstances is another positive step. It’s critical that both Ofgem and energy networks make sure that support for these groups is central to to what they do.”