The coronavirus lockdown has forced UK Power Networks (UKPN) to suspend “about 50 per cent” of its planned work as it focuses on performing safety critical functions and delivering connections for other essential services such as healthcare.
Chief executive Basil Scarsella told Utility Week that the distribution network operator should nevertheless be able to make up a lot of lost ground, so long as the crisis comes to an end relatively soon.
“We’ve been in lockdown for nearly four weeks so we have a backlog of connections that we’re starting to turn our minds to which we need to catch up at some point,” he said.
Once the lockdown is over, Scarsella said the company will initially prioritise delayed connections work for customers before moving on to non-essential maintenance. He said it should be possible to complete much of this work later in the year with some additional help from external contractors.
In the meantime, some connections currently deemed low priority are likely to be bumped up into the high priority category: “Not every building site has been shut down. If they get to the stage where, for example, a major building is complete and ready to be occupied and the only thing that’s missing is the electricity connection then clearly we’re not going to hold that back.”
Scarsella has been “very pleased” with the guidance from government and Ofgem so far. He praised Ofgem for being “supportive” and “pragmatic”, citing its open letter to networks stating its intention to take a flexible approach to regulation during the pandemic.
If the government’s mantra through this crisis has been to “stay home, protect the NHS and save lives,” Scarsella said the equivalent for UKPN has been to “protect our employees, keep the lights on and support our vulnerable customers.”
Of its workforce of around 6,000, roughly half have been working from home in recent weeks. For those still in the field, the company has provided an additional food allowance, permitted them claim expenses without submitting evidence and granted them sole use of a company van so they don’t have to share with others.
Scarsella said UKPN has not had any problems with staff being stopped by police on their way into work as reported by some generators: “There might have been some uncertainty and confusion in the early days, but no, we’ve haven’t had any issues. As soon as they were classed as key workers, we issued all of our employees – our field-based employees – with a letter from me”.
He now records a daily video message to update staff, which he said is being watched by thousands each day.
Whilst acknowledging that people like NHS workers deserve the praise they have received for the “absolutely magnificent work that they are doing”, Scarsella said some credit should go to utility workers who have also been providing essential services during the lockdown but have been “very rarely” mentioned in media coverage.
On the one hand, Scarsella said it is no bad thing for networks to be out of the spotlight at the moment: “If we’re not in the papers during this period, that means we’ve done a great job.” If they are, then it would most likely mean something has gone wrong.
He estimated that UKPN’s revenues would fall by between £30 million and £40 million during the lockdown due to a 10 to 20 per cent reduction in electricity demand on its networks.
Responding to concerns that this under-recovery could later lead to sudden spikes in network charges, Scarsella said there would be no opposition from UKPN to spreading these costs across a number of future years.
He said the company will do “whatever is necessary” to gain the trust and respect of the communities it serves: “The long term vision for UK Power Networks is to be an employer of choice, a respected corporate citizen and sustainable cost efficient.”
Scarsella said there will be few individuals or organisations that will spared from suffering as a result of the crisis and UKPN should be no exception, although he also said there should be “no mistake” that the company is already feeling the pain of reduced productivity.
With this in mind, the company has not taken advantage of any of the government’s initiatives to support businesses through the lockdown and does not intend to furlough any of its staff.
He also highlighted the company’s specific efforts to support vulnerable customers though the crisis, including creating a new app to help direct them to other essential services and setting up a community fund initially worth £500,000.
Looking further ahead, Scarsella said he had few concerns about the impact on the ED2 price control, noting that it is still several years away from starting and a lot of the preparatory work was due to take place in 2021 and 2022 anyway: “We’ve had to rearrange to work remotely rather than face-to-face but I don’t expect that, assuming we’re out of this in some form in a relatively short term, to have a detrimental impact on the delivery of ED2”.