Pay out more for blackout hell, MPs tell power giant

By SCOTT MACNAB
Published on 27/08/2012 01:18

POWER giant Scottish and Southern Energy (SSE) has been slammed by MPs over blackouts faced by residents in the Highlands and Islands, with calls for a beefed-up compensation scheme for those affected.

The Scottish affairs committee at Westminster has branded as “unacceptable in the 21st century” that people in the Highlands and Islands have no rights to compensation from firms for power cuts caused by extreme weather.

The call comes just days after SSE announced a price rise averaging of 9 per cent.

Liberal Democrat MP Alan Reid, who headed up the inquiry, said: “Especially now that they will be paying more, consumers have a right to expect good-quality service and to be compensated when they do not get it.”

After storms in December 2011 and January 2012 left tens of thousands of homes without power, SSE went beyond the legal requirements, paying £75 to households in the Highlands and Islands which went without electricity for 48 hours or more and £150 to people in Islay because the island’s power supply was interrupted several times over an extended period.

In the wake of the storms, which left some people without electricity for at least three days, the committee looked at the frequency and severity of weather-related power cuts and the impact they had on people, businesses and services.

While all of Scotland was disrupted by the weather, the most severe damage was in the Highlands and Islands over the two months.

Electricity firms face “particular challenges” supplying power to such an area, but the MPs said: “Customers in those areas should still expect to receive compensation if minimum standards of service are not met.”

They called on Ofgem to introduce best-practice guidance for power companies which supply to the Highlands and Islands, with a minimum level of service customers can expect alongside a corresponding level of compensation.

Current payments do not “adequately compensate consumers for the consequences of power cuts”, the committee said. Ofgem needs to consider “increasing compensation levels so that they more realistically reflect the effect on consumers”.

Consumers in the Highlands and Islands have no rights to compensation for power cuts caused by extreme weather events.

“This is unacceptable in the 21st century,” Mr Reid said.

“The value of compensation offered, and the conditions under which it applies, must adequately compensate consumers and incentivise the power companies to provide a high level of service.”

While the power companies’ performance has generally improved, some areas of Scotland have yet to see this benefit.

“Islay, in particular, was very badly let down by SSE,” Mr Reid added.

A spokesman for SSE said: “In recognition of the exceptional weather event experienced in parts of our network area at the turn of the year, we made ex-gratia payments – over and above the regulatory requirement – on a case-by-case basis to customers who were off supply for more than 48 hours.

“If Ofgem chooses to review the current regulatory framework, we will be happy to work with it in the best interests of our customers.”