- Publication date
- 30th May 2014
- Information type
- Policy area
• Ofgem found Scottish and Southern Energy Power Distribution (SSEPD) were too slow in providing connection offers to some customers
• SSEPD to give money to a community trust to assist electricity connections in rural areas
• SSEPD has cooperated fully with Ofgem in looking into this issue
Ofgem found that SSEPD did not provide some customers with an offer to connect to the electricity network within the prescribed timescales. In recognition of these failures, the company has paid £750,000 to the Scottish Hydro Electric Community Trust, to assist customers with the cost of electricity connections in rural areas.
During routine monitoring, SSEPD and Ofgem found that between August 2010 and September 2013 SSEPD did not meet the deadline to make a connection offer to 200 customers. As part of their licence conditions, electricity distribution companies have a maximum of three months to make connection offers to customers and must have the appropriate resources in place to deliver their work.
SSEPD was fined £500,000 by Ofgem in 2011 for breaches of the same licence conditions. They committed, at that time, to putting systems in place avoid a similar situation but these systems have been shown to have flaws. Today’s higher payment takes into account the failure to fully rectify the 2011 breach and the subsequent repeat of the same breach.
As well as providing an essential service to consumers, timely and cost-effective connections to the distribution system enable economic growth and help to decarbonise the energy we use. For the next electricity distribution price control, RIIO-ED1, Ofgem has included a time to connect incentive for companies to speed up time between application and connection offer.
Sarah Harrison, Ofgem Senior Partner with responsibility for enforcement said: “We welcome SSEPD’s admission that it breached Ofgem rules.
“Today’s announcement sends a clear message to electricity distribution companies that they must help customers to connect to their network in a timely and efficient manner.”
Ofgem takes strong action when companies fail to comply with their licence conditions having issued over £100m fines since 2010.
Notes to editors
1. About the case
This case relates to two Standard Distribution Licence Conditions (SLC):
• SLC 12 requires licensees to make a connection offer “as soon as reasonably practicable…and in any event within 3 months”
• SLC 30 requires licensees to ensure they have the necessary resources to meet all licence conditions.
SSEPD failed to reach the three month deadline 200 times between August 2010 and September 2013. 140 of the cases were by the company’s Scottish Hydro Electric Power Distribution (SHEPD) arm and 60 by Southern Electric Power Distribution (SEPD). SSEPD made over 90,000 connection offers in that period.
2. About Ofgem
Ofgem is the Office of the Gas and Electricity Markets, which supports the Gas and Electricity Markets Authority, the regulator of the gas and electricity industries in Great Britain. The Authority's functions are set out mainly in the Gas Act 1986, the Electricity Act 1989, the Competition Act 1998, the Utilities Act 2000, and the Energy Acts as well as arising from directly effective European Community legislation . In this note, the functions of the Authority under all the relevant Acts are, for simplicity, described as the functions of Ofgem.
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