Standard Issue Update
Electricity and gas distribution networks in Great Britain are responsible for maintaining and upgrading infrastructure that delivers electricity and gas to homes and businesses. Ofgem regulates these companies, setting Guaranteed Standards of Performance (GSOPs) to ensure minimum service levels. These standards include responding to service interruptions, connecting customers to the network, and providing customer service. When these standards aren't met, companies must compensate affected customers, with some payments made voluntarily.
Our new report, Standard Issue Update, evaluates network performance against the Guaranteed Standards from 2018/19 to 2021/22. We found that
Electricity and gas networks compensated customers nearly £84 million.
Electricity networks achieved a 98% average pass rate in interruption management, customer service, and connection standards.
Gas network performance varied, with pass rates ranging from 64% to 98%.
Over £4.5 million in compensation went unpaid.
The revenue adjustment mechanism led to £2.42 million in deductions from electricity companies for failing to pay compensation.
The introduction of automatic compensation led to a sharp increase in customers receiving payments for unnotified planned supply interruptions
Our Recommendations
For Ofgem:
Implement automatic compensation for all standards.
Expand the negative revenue adjustment mechanism.
Set clear annual performance targets with penalties for non-compliance.
Enhance transparency by publishing complete GSOP data, monthly breakdowns and standardised reporting.
For Network Companies:
Increase efforts to inform customers of compensation rights.
Strive for continuous improvement in meeting and exceeding GSOPs.
Invest in data quality to support accurate regulatory oversight.