Energy distribution firms threatened with fines over poor customer service

25th Aug 2017

Ofgem, the energy regulator, has informed Britain’s electricity distribution network operators (DNOs) that their revenue could be cut if they provide poor customer service.

Based on provisional information, Ofgem has warned the cut in revenue could be up to £13.9 million across all six DNO groups.

In a statement, Ofgem said: “Managing connection requests is an essential part of DNOs’ customer service, especially as the energy system is rapidly becoming smarter and more flexible. New businesses, generators and housing developers are among those that depend on an efficient connections service.

“As part of their 2015-2023 price controls Ofgem set DNOs an incentive to engage effectively with larger customers requiring new connections. Failure to meet minimum expectations can lead to a financial penalty. Following feedback from customers to our consultation in July, our view is that all DNOs may have fallen short of these expectations.”

Ofgem says many of the failings involve poor communication. Some customers struggled to get progress updates on their connection requests or found that information they were provided by a DNO was not detailed enough.

In other cases the DNO failed to explain the cost of reinforcing its network when making quotations for connections work. 

The regulator continued: “In general, DNOs seem to be improving their engagement and services, but some specific issues raised by stakeholders remain unaddressed. As a result, each of the DNOs faces a reduction in its revenue.

“Ofgem is consulting on its view, giving stakeholders and the DNOs a further opportunity to provide evidence on performance. A final decision on each DNO’s performance and whether they will face revenue penalties will be made by the end of November.”

In its latest Customer Satisfaction Index, The Institute of Customer Service found that satisfaction in the Utilities sector continues to improve and is at its highest point in 9 years, scoring 75.1 out of 100.

The Utilities sector’s CSI, 75.1, is 1.8 points higher than last year, and while the sector scored below the UK average, the gap has closed from 4.1 points a year ago to 3.1 points.

Share this