Electricity distribution network operators (DNOs) have been warned they may face penalties if they do not improve their performance on upgrading connections or connecting new customers to the network.The poor performance relates to connecting larger customers.
DNOs have a bonus/penalty scheme – the Incentive on Connections Engagement – intended to improve the way they engage with large and complex connections customers.
In its annual report on the DNOs’ performance in 2015/16 – the first year of the current price control period – Ofgem did not impose a penalty, saying “DNOs have engaged well. This is leading to the kinds of improvements in connections service that we expect. Nevertheless, there are areas that require further work”. But following a customer survey earlier this year it said found “issues with specific aspects of each DNO’s activities. These issues suggest that each of the six DNO groups may have fallen short in at least one area against the minimum criteria.”
Ofgem is consulting on the proposed penalties and is seeking responses by 15 September.
If Ofgem imposed the penalties proposed in its consultation Electricity Northwest would be penalised £0.62 million, Northern Powergrid £1.08 millon, Scottishpower Electricity Networks £2.58 million, Scottish and Southern Electricity Networks £2.90 million, UK Power Newtorks £4.62 million and Western Power Distribution £2.09 million. A penalty for the six DNOs, who own 11 network areas, would take the form of a reduction in the revenue they are allowed to collect.
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