Gas distribution network company Cadent has agreed to pay £24 million over supply failures in thousands of blocks of flats and lack of compensation for residents.
Ofgem said the company was increasingly leaving people in blocks of flats without gas “for longer than necessary” in 2018, for example, while repairs to gas pipes were carried out.
Cadent also 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, it reported to Ofgem that it had no records of gas pipes – sometimes referred to as risers – in 775 high rise blocks of flats in its London network.
The regulator says network companies are required to keep records of assets such as the pipes in their network – but the gas distribution firm failed to do so.
Cadent has admitted all three failings to Ofgem, acted to rectify the issues, implemented new processes to address them and submitted improvement plans for interruptions and record keeping.
It has committed to setting up a £20 million community fund to support consumers in vulnerable circumstances and will pay £3.6 million to Ofgem’s consumer redress fund administered by the Energy Saving Trust.
The gas distribution network company will also double the statutory compensation payments, at an estimated cost of £6.7 million, made to customers who experience an unplanned gas supply interruption for more than 24 hours over the next two years.
Ofgem said it has now closed its investigation into the record keeping failures and will not take further action over gas supply interruptions and delayed compensation payments.
Chief Executive Dermot Nolan added: “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.
“Ofgem has worked with the company, which is now 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 has also agreed to make a significant financial contribution to customers as redress in recognition of its past failings. This is a move we welcome.”
Cadent apologises to customers in London for delays in getting their gas back on and acknowledges historical missing records.
Chief Executive 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.
“While Cadent is a relatively new business, some of its record keeping processes and practices go back many decades and a number of the issues we are addressing today are a legacy of that past. We are taking the opportunity to reshape the company to set new standards of customer experience and are investing significantly through our community fund to reach those customers in the most vulnerable situations.”