MPs make power cut compensation payments call

image captionStorms at the turn of the year left tens of thousands of homes without power

A committee of MPs has said people living in the Highlands and Islands should be compensated when extreme weather causes power cuts.

The region is currently the only part of the UK where householders do not have the legal right to claim compensation when they are without power for extended periods of time.

The Scottish Affairs Committee said this was "unacceptable".

Storms left tens of thousands of homes without power in December and January.

The Highlands and Islands were among the areas worst affected, with many people left without power for three days.

In the wake of the blackouts, energy firm SSE - which last week announced it was raising its prices by an average of 9% - opted to pay £75 to customers in the Highlands and Islands who were without electricity for 48 hours or more.

It also agreed to pay £150 to people on Islay because the island's power supply was interrupted several times over an extended period.

But there was no legal obligation on the firm to make the payments.

The Scottish Affairs Committee said this state of affairs should change - and also called on energy regulator Ofgem to consider raising the amount paid out by power companies to a more realistic level.

In every other area of the UK, consumers are legally entitled to £25 for either the first 24 or 48 hours of a power cut caused by bad weather, depending on the category of weather, with a further £25 payment for each additional 12 hours.

Committee members acknowledged that electricity companies faced "particular challenges" in supplying power to remote rural communities.

But their report stated: "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 pointed out.

Ofgem needs to consider "increasing compensation levels so that they more realistically reflect the effect on consumers".

Monitor performance

Alan Reid MP, the committee member who led the inquiry, said: "A big gap in the compensation rules is that 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.

"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.

"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."

He said that "many communities had to endure over three days without power last January".

While the power companies' performance has generally improved, the committee said it was "very concerned that this is not the experience of all communities in Scotland" and that "Islay, in particular, was very badly let down by SSE".

Ofgem should monitor performance at a more local level because this will "help ensure that problems disproportionately affecting smaller communities are exposed and addressed at an early stage", the committee said.

Mr Reid added: "Ofgem also needs to work with the energy companies to better co-ordinate and communicate in emergency situations."

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