Ofgem hands down record-breaking £44m enforcement to Gas distributor Cadent

Cadent, the company which distributes and pipes natural gas into homes in several regions of the UK, has received Ofgem’s largest ever enforcement of £44m.

Ofgem hands down record-breaking £44m enforcement to Gas distributor Cadent

Think you've had a big parking ticket or speeding fine? Well, Cadent, the company which transports natural gas into homes across a lot of the UK, has just received Ofgem’s largest ever penalty of £44 million. This enforcement is due to leaving customers without gas for long periods of time - in some cases for up to five months!

The enforcement consists of a £24m fine, and also creates a £20m community fund, which will “support customers in vulnerable circumstances”. The community fund is due to receive 1.25% of Cadent's post-tax profits, which last year totalled £724m.

In addition to this, Cadent is also to pay £300,000 (double the expected amount) to over 2,000 customers whose compensation has been delayed since 2018. Cadent also informed Ofgem that it has not paid compensation to up to 12,000 affected consumers whose gas was interrupted for over 24 hours over the last 6 years.

Ofgem opened the investigation in 2018, after a local council initiated an information request connected to the Grenfell tragedy (Cadent did not supply Grenfell).

Ofgem has also made it clear that “Consumers will pay none of the full costs (£3.6 million) associated with Cadent investigating and putting right the issues associated with the investigation”.

Steve Hurrell, chief executive of Cadent said:

"We aim to put customers' needs at the heart of everything we do, and we acknowledge that in the past, we have fallen short of customers expectations and the higher standards we have now set ourselves; for this, we are sorry."

Mark Todd, co-founder of energy price comparison service, energyhelpline said:

“We applaud OFGEM for getting tough with Cadent and hitting them with a record fine for what was truly shocking service. To leave some customers without gas for months is a total disgrace. We hope that Cadent now bucks up its ideas and ensure this never occurs again.”

Dermot Nolan, chief executive of Ofgem, said:

“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.

 

Should Cadent fail to improve their future performance, Ofgem says they could take further action. “If Cadent’s improvement plans are not fully implemented, or the proposed payments are not made, Ofgem reserves the right to revisit these issues and take appropriate action,” they said in a statement.

 

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