Energy network operators must improve customer service or face revenue cuts, warns watchdog
Electricity distribution network operators could have their revenue slashed if their customer service does not improve, Britain’s energy watchdog has warned.
Ofgem announced on Monday that six electricity distribution network operators (DNOs) are failing to engage effectively with new larger customers requesting connections to the grid.
As a result the DNOs – Electricity North West, Northern Powergrid, Western Power Distribution, UK Power Networks, SP Energy Networks, Scottish and Southern Electricity Networks – face their revenue being cut by £13.9 million.
“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,” a spokesperson for Ofgem said.
“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.”
Earlier this year Ofgem told gas and electricity networks to expect tougher price controls amid claims that they are exploiting consumers to enjoy £7.5 billion in “unjustified” profits.
Ofgem has told energy network companies to brace themselves for a tougher regime from 2021 and said investors in these firms must prepare for lower returns as it pledged to deliver “even better value for customers”.