The UK’s leading gas distributor has received a record £44m penalty from the energy regulator for leaving residents of tower blocks without gas for up to five months.
Cadent, which pipes gas into 11m homes and businesses, left customers without supplies for an average of 19 days, Ofgem said. Thousands of people were affected by unplanned outages in 2017 and 2018, many of them in north London. In the worst cases, customers were left without gas for five months.
In further failings, over a six-year period, Cadent did not pay compensation as required to a possible 12,000 affected residents left without gas for more than 24 hours. It also had no records of 775 blocks of flats, mainly in its London gas network, which meant those buildings were not included in the distributor’s regular inspection or maintenance programme.
The extent of the gap in Cadent’s records emerged after the Grenfell Tower fire prompted an inquiry into incomplete records of gas pipes in high-rise buildings. Cadent did not supply Grenfell.
Dermot Nolan, the chief executive of Ofgem, said: “Cadent has a duty of care and responsibility to millions of people across half of the country who rely on the gas it pipes to their homes for cooking and heating.
“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.”
The company, formerly known as National Grid Gas Distribution, owns and manages four of the eight gas distribution networks in the UK – in the West Midlands, north-west England, east of England and north London. It will pay £24m for compensation and improvements. In addition, Cadent is to set up a £20m community fund to support vulnerable customers.
Steve Hurrell, Cadent’s chief executive, apologised for the failings: “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.”
Cadent has also agreed to double the statutory compensation payments, at an estimated cost of £6.7m, made to customers who experience an unplanned gas supply interruption for longer than 24 hours over the next two years.
Gillian Guy, the chief executive of Citizens Advice, said: “Today’s announcement will be welcome news for those who were left without supply because of Cadent’s failures. When energy network companies fail to deliver good levels of service, customers should be compensated.”
