Energy regulator Ofgem intends to impose financial penalties on three local power network companies totalling £1m for failing to provide timely offers for connections to the local electricity network.

Scottish Hydro Electric Power Distribution (SHEPD) and Central Networks (CN) were fined £500,000 and £400,000, respectively, for failing to meet the three-month deadline for providing connection offers in a number of cases, and for not having systems and processes sufficient to monitor provision of their connections service. Ofgem was particularly concerned that SHEPD was not able to demonstrate full compliance until the second half of 2009. In addition, Electricity North West Limited (ENWL) was fined £100,000 for failing to meet the three-month deadline in a number of cases. The companies have all cooperated with Ofgem’s investigation and have accepted its findings. This is reflected in the level of Ofgem’s penalties, which otherwise would have been higher.

Stuart Cook, senior partner, Smarter Grids and Governance, of Ofgem said: "Customers such as developers of housing estates or wind farms are reliant on local power network companies to provide a good service on connections. Today’s penalty sends a clear message that the companies must meet the standards set by Ofgem for connection services. We recognise that all three companies have taken steps to improve their connection services, in some cases prior to the commencement of the investigation, but they should have taken this action sooner."

Given the need to invest £200 billion in our energy industry in the next 10 years, more than £30 billion of that in networks, it is vital that customers get prompt connections, especially given the need to expand local renewable generation schemes to deliver secure and sustainable energy supplies for consumers.

To improve the level of service customers receive from local power network companies when requesting a connection, Ofgem has now introduced compensation arrangements when local power network companies do not meet targets for good customer service in connections. From Oct. 1, 2010, customers will receive compensation payments automatically when certain standards are breached by the companies.