Power cut payouts for Highlands and Islands

Electricity customers in Highalnds and Islands will now be entitled to compensation in event of power cuts. Picture: Ian Rutherford
Electricity customers in Highalnds and Islands will now be entitled to compensation in event of power cuts. Picture: Ian Rutherford
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Electricity customers in the Highlands and Islands are set to win rights to compensation for power cuts.

• Highlands and Islands electricity customers to win compensation rights for power cuts

• Residents had been exempt from compensation due to “prohibitive” costs of making Highlands and Islands network more resilient to residents

Residents are currently exempt from payments, but energy industry regulator Ofgem has announced they are to end this anomaly – a move welcomed by north politicians as “long overdue”.

In most of Britain customers are entitled to compensation if the quality of service they receive falls below agreed standards.

A disruption to the power supply for more than 18 hours can result in a £54 payment, with an further £27 for every additional 12 hours without power.

Ofgem is set to reduce the timescale to 12 hours.

The moves were revealed in the organisation’s new framework for electricity distribution networks (DNOs) which will run from 2015 to 2023.

An Ofgem spokeswoman said: “The reason we will be removing all specific exemptions related to Highlands and Islands customers from the guaranteed standards is to ensure consistency of payments for all customers across the country.

“The exemptions that apply to Highlands and Islands customers were introduced due to the network structure in particular parts of Scotland.

“In these areas, the network is less resilient than in other parts of Great Britain and the work that would be required to raise resilience to an equivalent level could be prohibitively expensive for the affected customers to bear.

“The decision to remove these exemptions resulted from experience during the current price control, where storms in December 2011 and January 2012 affected tens of thousands of customers but resulted in confusion over eligibility for payments.

“Removing this exemption will therefore improve clarity for all customers without significantly affecting the level of risk to which DNOs are exposed.”

She added: “Ofgem is leading customer improvements in a number of areas, including reducing the time a customer is off supply before becoming eligible for a compensation payment from 18 hours to 12.

“From the start of the price control, these payments will increase in line with inflation and be available to all customers, following the removal of the current exemptions for the Scottish Highlands and Islands areas.”

Highland Council deputy leader, David Alston, said: “This is long overdue, but very much welcome.

“There has been a particular irony in the Highlands that we produce so much of the country’s electricity, but had lower standards when it came to compensation.

“It is a shame it will take two years to come into force, but we are thankful that it has at long last been recognised.

“We will now continue to pursue other issues, such as the higher prices for customers in the Highlands.”

Danny Alexander, Lib Dem MP for Inverness, Nairn Badenoch and Strathspey and secretary to the Treasury, has welcomed the move.

He said: “I’m delighted to see this ridiculous inequality is to disappear and that Ofgem has recognised the anomaly.

“People in the Highlands face some of the most severe weather in the country, making them heavily dependent on power supplies.

“To then exclude them from compensation available to everyone else in the country who suffered power cuts was a nonsense.”