By Marcus Leach
Energy regulator Ofgem has today (Wednesday) announced its intention to fine National Grid Gas (NGG) and Northern Gas Networks (NGN) £4.3m and £900,000 respectively for failing to meet mandatory targets for attending and assessing gas escapes on time last Winter.
The timescales they have to meet for this are set out in the gas transporter licence.
The Health and Safety Executive (HSE) is the gas safety regulator but Ofgem sets standards for how quickly gas companies must respond to gas escapes. Gas Distribution Network Operators (GDNs) have annual targets to respond to 97% of uncontrolled gas escapes within one hour, and 97% of controlled gas escapes within two hours. All GDNs have to report their performance against these targets to Ofgem each year.
Neither the companies nor HSE reported any consumer harm as a result of failure to meet these targets. However, NGN and NGG have now incorporated the lessons learned from last winter into their plans for this year.
“Consumers pay for these important service standards and have a right to expect that they will be met. Today’s announcement sends a clear message to energy network companies that they risk a financial penalty from Ofgem if they don’t meet their obligations to continue to uphold Britain’s very high standards in responding to gas escapes on time," Rachel Fletcher, Senior Partner Smarter Grids and Governance, Distribution, Ofgem said.
“Ofgem accepts that many parts of Britain experienced bad weather conditions over the last year and individual members of staff from NGN and NGG worked hard in difficult conditions to reach customers that reported gas escapes. However, both companies need to plan better for bad weather and ensure that adequate resources and contingency plans are in place to meet the annual targets.”
Between April 2010 and 31 March 2011, NGG and NGN failed to meet the target of responding to 97% of controlled and uncontrolled gas escapes within time limits. NGG reached between 92.1% and 96.1% of uncontrolled gas escapes in all four of its GDNs. NGG reached 96.8% and 95.1% of controlled gas escapes in two of their four GDNs within the time limits.
Over the same period NGN reached 91.6% of uncontrolled gas escapes and 94.3%, of controlled gas escapes within the time limits.
The penalties reflect the importance of compliance, the full cooperation of NGN and NGG with Ofgem’s investigation, and their agreement to settle this matter. The level of the penalties exceeds any gain there may have been from non-compliance. The penalties also reflect the action both companies have taken to revise their plans and ensure they have increased resources available for this winter. Without all these factors, the penalties would have been higher.
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