Power supply company Northern Powergrid has increased its profits and the dividend it pays to shareholders despite thousands of its customers being left without power for lengthy periods after Storm Arwen.
Thousands of people across the North East were left without power - some for more than a week - when Storm Arwen wrought chaos across the top of the UK last November. Newcastle-based Northern Powergrid (Northeast) - which serves 1.6m customers between Northumberland, York and the Pennines – was told by regulators to send compensation to customers, with each affected household allowed to claim £70 for the first 48 hours without power and followed by an additional £70 for every 12 hours after that.
Accounts for the company for 2021 have now been published showing how the company’s operating profits was hit by costs relating to Storm Arwen of £15.5m, which it described as “the most significant weather event that the company had faced in more than two decades.” Costs of £7m relating to the storm are being included in the current year’s accounts, which the firm says relates to work on its electricity network needed as a result of the damage caused by Storm Arwen.
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The accounts say: “Storm Arwen had a significant impact upon a relatively small number of Northern Powergrid’s customers, with some households being left without power for prolonged periods. The scale and nature of the event meant that Northern Powergrid’s strong levels of customer service was affected, due to the number of customers who needed help, high call volumes and overwhelming website demand.
“Northern Powergrid recognises the impact going without power can have on its customers and is working with Ofgem to ensure those who were affected are properly compensated and that improvements are made in the future.”
The accounts said that Storm Arwen had contributed to falling customer satisfaction levels. Despite that, overall revenues rose from £355.6m to £385.2m in the year ended December 31 2021, while operating profit rose from £125.21m to £147.6m.
An interim dividend of £26m was paid out to shareholders, an increase on the previous year’s interim dividend of £25.4m.
The company said it had worked on an improvement plan during the accounts year, which included the development of a customer relationship management system and the roll-out of a system giving improved real-time customer communication during an outage. It added that during 2022 it is to focus on technology, while also deploying a new contact centre telephony platform and an upgrade to the Northern Powergrid Group’s external website.
Allendale parish councillor Dani Henderson, who was left without power for a whole week, said: “For them to make so much profit in a year when so many people have had to fight so hard to be compensated is insulting. And I know of so many people who had to go through their MP to get it because the system wasn’t working.
“Some people have also been receiving ‘apology’ payments, although there’s no rhyme nor reason as to who gets it and who doesn’t. And they didn’t compensate anyone for loss of food, and everyone lost their freezer food after that amount of time. They still make profits while people are still losing out of pocket.”
Following publication of the accounts, a spokswoman said the company’s teams worked tirelessly to repair the damage caused by the storm, compensate customers who were without power for long periods of time and reimburse costs incurred as a result of any power cut through welfare support. She said the company has paid out more than £11.5m in compensation in relation to Storm Arwen.
She said: “Since 2005 we’ve reinvested 95% of our profits, after tax, back into our business. This approach has supported our current £3bn 2015-23 investment plan and we have submitted our five-year business plan (2023-28) which sets out our proposals to invest a further £3bn to help improve network resilience and reliability, support decarbonisation and help create a greener energy system for the communities we serve.
“Network operators like Northern Powergrid generate their revenue from the network related charges customers pay which appear on customers’ bills from their chosen electricity supplier. Our network related charges equate to around 25p a day for the average domestic household and we remain focused on delivering reliable, efficient and affordable services for our customers in the years ahead.”
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