Cadent, the UK’s leading gas distribution network, is to be hit with £44m in additional costs for a litany of “past failures” including leaving residents in blocks of flats without gas and neglecting to keep proper records, Ofgem, the country’s energy watchdog said on Wednesday.
The company, which pipes gas to around 11m homes and businesses in the UK, has agreed to pay £24m and establish a £20m community fund, after the regulator laid out “three serious failings” by the company.
Cadent acknowledged that during 2018 it had increasingly left residents in blocks of flats without gas for longer than necessary in situations including carrying out repairs to gas pipes.
It had failed to pay compensation over a six-year period to a possible 12,000 affected residents left without gas for over 24 hours. And it had not kept records for 775 high rise blocks of flats in its gas network, which as a result were not part of its inspection or maintenance programme.
Ofgem said that Cadent, which was spun out of National Grid in 2016, had admitted to each of the failings and taken steps to rectify them.
“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.
“Cadent acknowledges that it failed these customers by leaving many without gas for longer than necessary, failing to properly compensate some of those affected and not having the proper systems in place to keep records of all the high rise blocks of flats it supplies.”
“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.”
A Cadent spokesperson was unable to immediately provide comment on the matter.