British gas network company Cadent pays record penalty for supply failures

LONDON (Reuters) - British gas network company Cadent has paid a record penalty of 44 million pounds for failing to properly supply gas to some customers, regulator Ofgem said on Wednesday.

The penalty, which will see Cadent pay 24 million pounds for improvements and compensation and set up a 20 million pound community fund, comes a week after Britain's opposition Labour party set out plans to nationalise the sector if it comes into power.

Cadent Gas generated an operating profit of 724 million pounds in 2018.

Ofgem said Cadent had no records of 775 high rise blocks of flats in its gas network and said some customers were left without gas longer than they needed to be and did not receive adequate compensation.

"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," said Cadent Chief Executive Steve Hurrell.

The second largest Ofgem penalty was for 28 million pounds paid by energy generator Drax in 2014 for failing to meet a target on helping households save energy.

Labour said last week an overhaul of Britain’s energy infrastructure, such as gas pipes and electricity cable was needed to prevent network firms generating "unjustly high profits" at a time when there is pressure to lower the cost of energy for households.

Cadent Gas Limited owns and manages four of the eight gas distribution networks in the UK: West Midlands, North West England, East of England, North London, supplying gas to around 11 million homes.

It is 61 percent owned by a consortium including Macquarie Infrastructure and Real Assets, Hermes Investment Management, Qatar Investment Authority and 39 percent owned by Britain’s National Grid.

(Reporting by Susanna Twidale; Editing by Alexandra Hudson)