Ofgem investigations result in £50m hit for gas distributor

Gas distributor Cadent has taken a £50m hit for a series of serious failings that including poor service to thousands of customers and inadequate record-keeping.

Investigations by Ofgem have resulted in a £24m payment and improvement plan, the creation of a £20m community fund for vulnerable customers, and Cadent doubling the statutory compensation it pays out, at an estimated cost of £6.7m.

Coventry-based Cadent employs 4,000 people and owns four of the eight regional distribution networks, operating in the West Midlands, North West, East of England and North London.

Dermot Nolan, chief executive of Ofgem, said: “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.

“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.”

Cadent is the brand name for the former National Grid Gas Distribution business. It was launched two years ago after a 61% stake was bought by an international consortium including Macquarie and the Qatar Investment Authority.

Ofgem recognised the new owners have given a “commitment to improve its operations to put customers at the heart of the business”.

The regulator said Cadent had “acknowledged” three principal failings – leaving residents in blocks of flats without gas for longer than necessary while undertaking repairs, not paying compensation over a six-year period to a possible 12,000 affected residents, and having no records of gas pipes in many high rise blocks of flats in its London network which were then not part of its regular inspection or maintenance programme.

Click here to sign up to receive our new South West business news...
Close