Households losing power in bad weather set to receive greater compensation

The amount of compensation households get when they lose power in severe weather has been increased to £2,000 by Ofgem.

The energy regulator has upped the maximum payment from £700 following its review of the response to Storm Arwen by distribution network operators – the companies responsible for linking up homes to the electricity network operators (DNO).

Storm Arwen battered the UK with 100mph winds and rain in 2021, causing at least three fatalities and leaving one million homes without power, with some having to wait over ten days to be reconnected.

At the time Ofgem said that households were left without power for an unacceptable amount of time and received poor communication from their network operator, resulting in almost £30 million compensation being paid out.

As part of the review, the length of time households have to wait for additional compensation has also been reduced from 12 hours to 6 depending on the severity of the storm – with payment coming within 24 hours for a category one and 48 hours for a category two. It has also completely done away with category three.

The changes mean more customers will be entitled to higher levels of compensation that better reflect the impact having power cut off for extended periods has on a household.

Any DNOs who fail to follow the new rules could face multi-million-pound fines.