Dartford MP, Dr Howard Stoate, mounted a scathing attack this week on the regulations that have allowed the energy company EDF networks to effectively exempt itself from paying compensation to households affected by July’s three day power cut in Dartford.

Speaking in a debate on the power cuts in the House of Commons on Tuesday evening, Dr Stoate complained that the current regulatory framework “bends over backwards to be fair to power companies” and that as a result ordinary domestic customers aren’t being adequately protected.

As it stands now the ‘Guaranteed Standards of Performance Regulations’ allow energy companies to exempt themselves from paying out compensation to customers after a major power interruption if they claim that it was caused by factors beyond their control. The companies themselves decide how to interpret and apply these regulations and neither the energy regulator, OFGEM, nor the Department for Energy and Climate Change have any influence over the process.

Dr Stoate told MPs that the time had come to scrap the current system of exemptions and compensate affected customers in full according to the statutory compensation tariff.

“It is not fair to penalise customers for events beyond their control leading to power cuts that have caused them great inconvenience, loss and hardship. Many people have lost well over £100-worth of food and other goods that are not covered by their policy excesses. Many of my constituents find it extremely hard to meet the extra costs involved;” said Dr Stoate.

“Rather than bending over backwards to be fair to the power companies, we should remember that our first responsibility is towards ordinary customers in ensuring that they are treated fairly. Having seen the hardship caused to my constituents by these power cuts, I should like the exemptions to the guaranteed standards system to be scrapped altogether and full compensation to be paid to every customer who applies for it. Will the Minister review the current arrangements so that customers who, through no fault of their own, have suffered considerable hardship are treated with at least equal fairness, and preferably with the balance of fairness in their direction? They deserve better than they have received.”

Up to now DECC has always defended the regulations and the exemption process. In a letter to Dr Stoate last month for instance the Energy Minister, Lord Hunt argued that “the purpose of the Guaranteed Standards system is to encourage companies to provide acceptable standards of service, not to penalise them for events beyond their control.” On Tuesday however the Energy Minister, David Kidney MP, agreed to look again at the regulations after to listening to Dr Stoate’s strongly worded attack on the system.

“The regulations would provide larger payments to more customers if the exemption did not apply. That point was raised by my honourable friend the Member for Dartford. EDF certainly did not consult me on whether it should claim an exemption. I have asked whether I can object to it claiming an exemption, but apparently the regulations do not provide for that. My hon. friend asked whether I would look closely at the regulations in future, and I certainly will;” said Mr Kidney.

Notes

In response to July’s power cuts EDF has offered customers without power for at least 24 hours a ‘goodwill’ payment of £50 in lieu of compensation. In normal circumstances after an unexpected power cut however a customer would receive £50 for the first 18 hours without power with £25 for each subsequent 12 hours without power (eg £150 for 66 hours without power).

OFGEM is in the process of auditing EDF’s application for an exemption to the ‘Interruptions Incentives Scheme’ (IIS) which sets performance targets for companies to encourage minimal service interruptions for consumers. This audit is due to be published at the end of October or early November.