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Gas firm to pay record £44m penalty for supply failures

A lit ring on a gas hob at a home in north London. Photo: Yui Mok/PA Wire

A company that left thousands of customers without gas for weeks at a time has received the biggest-ever enforcement action of £44m from Ofgem.

Cadent Gas, which operates and maintains local pipes in four regions of England, will pay £24m for improvements and compensation, as well as £20m for a community fund that will support customers in “vulnerable circumstances”.

The energy regulator said Cadet also had no record of 775 properties.

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The discovery was prompted by an information request from a council following the Grenfell Tower tragedy, which opened an investigation into Cadet’s record-keeping. However, Grenfell was not one of the premises missing from Cadet’s database.

Cadet’s improvement plan will address three serious failings:

Data supplied to Ofgem showed the company was leaving residents in blocks of flats without gas for longer than necessary – for example, while repairs to gas pipes were carried out.

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It also reported to Ofgem earlier this year that it failed, over a six-year period, to compensate up to 12,000 residents who were left without gas for over 24 hours.

It also reported it had no record of gas pipes in many high-rise blocks of flats in its London network – meaning they did not receive inspection or maintenance.

As part of the penalty, Cadet will double the statutory compensation payments – at a cost of £6.7m – to customers who experience an unplanned gas supply interruption for longer than 24 hours over the next two years.

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“Cadent has a duty of care and responsibility to millions of people across half of the country who rely on the gas it pipes to their homes for cooking and heating,” said Dermot Nolan, chief executive of Ofgem.

He added: “Ofgem has worked with the company, which is under new ownership and has given commitment to improve its operations to put customers at the heart of the business, to help it address its failings and prevent further harm to customers’ interests.”