Oral evidence: Power disruption due to severe weather, HC 1020Tuesday 21 January 2014

Oral evidence, 21 January 2014.

Witnesses

Frank Mitchell, Chief Executive, ScottishPower Energy Networks, Basil Scarsella, Chief Executive, UK Power Networks, Mark Mathieson, Managing Director, Networks, Scottish and Southern Energy, Steve Johnson, Chief Executive, Electricity North West, Robert Symons, Chief Executive, Western Power Distribution, and David Smith, Chief Executive, Energy Networks Association, gave evidence.

Chair

Good morning. Thank you very much for coming in. For several of you, I know it is the first time you have given evidence to us orally. The reason why you are here is very simply that too many of your customers lost power for too long at a very important time of the year, and the compensation that they have received is, in my judgment, too small. To begin, could you confirm—this is for each of the DNOs—how many of your customers lost power as a result of the bad weather over Christmas, and for how long? How many of those lost power for more than 24 hours? Perhaps if I just run along the list, Mr Mathieson first.

Mark Mathieson

I will start on the south England patch. It was an incredible event, and when you look at the damage on infrastructure elsewhere you can see some of the things that were going on. We had 620,000 customers who were impacted. There were two waves that came in to start with. One was on the Monday night, the next on Tuesday morning, and a third on Boxing Day. I think it is important to say that 80% of customers were not impacted by this, so the 620,000 is 20% of our customer base. Two thirds of those customers were back on within two minutes through automation; the grid self-heals, which is something that we have developed over the years as an industry. If you look at the remaining customers, the 200,000 that we had off, we got that down, through Christmas Eve, to fewer than 20,000 by Christmas Day morning, and that was an absolutely superb effort by our staff. I think it was exceptional, to get it down to that. We went into Christmas Day with under 20,000 off. We worked through Christmas Day. We got another two-thirds of those restored, so by Boxing Day morning we had 6,000 off. Every day, we were getting probably about another two thirds back on, albeit that on Boxing Day eve there was another storm that took a further 10,000 back off, so we quickly got those connected back on. We restored our last 500 customers on the Saturday and, as I say, that was quite exceptional. If I move to the north, we got hit by the same event in the north of Scotland, which again is very unusual. In the nine years I have been managing the network’s business, I have never had the same weather event hit 650 miles away and do damage. In the north we had under 60,000 affected. Again, 70% of them were back on within minutes as the grid self-healed. We had 15,000 customers off on Christmas Day. We restored them all, apart from one or two mass sites that were difficult to get to. We had a lot of snow in high areas in Scotland, so it took us one or two days just to get ourselves up to radio masts and that. In terms of domestic customers, they were back on within the day.

Basil Scarsella

From UK Power Networks’ perspective, we had 460,000 customers off over that period, 130,000 in our eastern network and 330,000 down south. The 130,000 customers in the eastern network were all back by Christmas morning. Therefore, on Christmas Day there were very few, if any, customers off, and if they were off, they were off only because the power had gone off on Christmas Day. Basically, it was all done in the east. In the south, as I said, we had 330,000 off. 145,000 were back on—this is similar to what Mark said—within three minutes because of the automation on our network. On Christmas morning, we had 20,000 customers off. During Christmas Day—there was a brilliant effort by our staff, and clearly we feel sorry for our customers that the power was off over Christmas—there were 20,000 customers off on Christmas morning, and 10,000 were restored during Christmas. Unfortunately, the weather was still bad during Christmas, and we lost another 5,000 during Christmas Day. It took us six days to eventually restore everybody’s power, but importantly we had 95% of the 460,000 customers back within 24 hours.

Steve Johnson

Electricity North West. We were not affected by the strong winds on 24 December. Although we did have the winds, the network held up very well. We got hit by excessively strong winds late on Boxing Day evening, about 10.00 pm, and unusually those strong winds lasted right the way through until about 7 o’clock on the 27th, with gusts of up to 100 miles an hour. During that period, we lost 45,500 customers. As you have heard, many of those customers can be restored automatically and through remote switching. Conditions were too dangerous to send our people out for the first six to eight hours, but by first light on the 27th, 67% of customers had been restored, and by the end of the day, within 24 hours, we had restored 98% of the customers. We did have, unfortunately, 16 customers who just went over the 48 hours, but all told we did very well, in particular on that first day, getting the vast majority of the customers back on supply.

Robert Symons

Robert Symons, Western Power Distribution. The winds hit the south-west of the country first and were severe, as my colleagues have described. In total, we lost 133,790 customers, and those were customers that were off supply for more than two minutes. 61% of the customers were restored within the first hour, 86% restored in three hours, and 99.16% within 12 hours. 13 customers were off supply more than 24 hours, and then by just 19 minutes. In terms of storm restoration, we had 16 times the number of faults we normally expect on a daily basis. I think we restored fairly quickly and fairly well.

Frank Mitchell

Frank Mitchell, SP Energy Networks. We cover the south of Scotland, Merseyside and north Wales. We had two weather events happen over the festive period, the first being overnight on 23 and 24 December, when we experienced wind speeds in north Wales of 80 miles per hour, and 85 in the south of Scotland and the Scotland area. So that Members are aware, I have also submitted some of this to the Committee, so you have this already. Across our 3.5 million customers, we had about 9,500 customers impacted by that weather event. 95% of them were restored by noon that day, and the remainder in the rest of that day, in the afternoon or early evening, so we had no customers off on Christmas Day as a result of the severe weather overnight and on Christmas Eve morning. We then had a subsequent weather event that came in on the evening of 26 December. It started to develop at 9.00 pm, and we had severe weather in the Scottish area and particularly in the north Wales area. In the Scottish area, we had wind speeds of 80 miles per hour, but it was the duration of the storm that was significant for us. It lasted 18 hours, so it was 18 hours before we could have people working at height to do repairs, because above 60 miles per hour it is dangerous to do that. Regardless of that, we still had 95% of customers restored in the first 14 hours. We worked through to 3.00 am that night in Scotland, and had another 600 customers on, which left 150 customers off overnight, and they were restored the following day in the Scotland area. In the north Wales area particularly, which experienced some of the most severe wind speeds we had seen, particularly the Llŷn peninsula, where there were wind speeds of almost 110 miles per hour, we had 45,000 customers impacted by the storm overnight on the 26th and 27th. Again, it lasted 18 hours, but still, within the first 18 hours, we had 95% of customers restored, so 43,000 of those were restored by 3.00 pm on the 27th. We worked through the night, up until the early hours of the morning, and then the following day to get 99% of those restored by 3.00 pm on the 27th. Unfortunately, where we had very significant damage, we did have 140 customers who were off overnight for more than 48 hours, but we had proactively contacted those customers and offered them accommodation and so on, because we predicted that was going to happen as a result of the extent of the damage we had. 140 customers overall were off for more than 48 hours, out of 3.5 million customers.

Chair

That is a helpful introduction to our session. Mr Smith, in the light of what you have just heard, do you stand by the Energy Networks Association report that only 75,000 customers were without power for more than 24 hours?

David Smith

Obviously, we were doing this in real time, and as you look at it, customers were coming on at any point, so that figure would have been right at the point at which we issued it.

Chair

What is the right figure today?

David Smith

I am sorry, I do not have that figure off the top of my head today.

Chair

As the trade body, three weeks after this problem, you can’t tell us how many customers were without power for more than 24 hours?

David Smith

I will have it buried in my head. I will tell you that figure as soon as it comes into my head. Apologies; I just do not have it off the top of my head, Chairman.

Chair

I would have thought it was a question you might have predicted would be asked by this Committee. It does not suggest that you are exactly on top of the problem. There appears to have been a very varied response. Could I ask in particular UK Power Networks and SSC about the fact that your experience appears to have been more difficult? What do you think the reasons for that are?

Basil Scarsella

Chairman, there are a number of reasons. First is the extent of the weather event. It was unusual, in that the wind speeds in the storm came true on the 23rd, and it lasted until about lunchtime on the 24th, so the storm was nearly 12 hours long, and winds reached in excess of 80 miles an hour. If you combine the duration of the storm together with the wind speed, generally you will get significantly more damage. It hit, as I said earlier, our southern network, and then it slowly moved north and hit our eastern network. On the damage caused, as I said, 95% of our 330,000 customers down south were restored within 24 hours. One of the reasons why it took such a long time to restore the rest was that the damage was not just on one part of the network; it was right across, from high voltage to low voltage, down to the single premises. It took significantly longer to repair the damage than, for example, in St Jude back in October, when our eastern network was hit. St Jude lasted for an hour. Wind speeds were similar to those in the Christmas storms, but it came in, lasted for an hour and moved on, and the damage there was significantly less, or less severe. We were not able, for example, to move our resources from east to south, because east was also being hit. Like I said earlier, all credit to our work force, because during the Christmas period they were all in; they worked 18-hour days over Christmas to restore the customers, but importantly the damage that was caused on the network took significantly longer than it normally does.

Mark Mathieson

To back that up, as I said in the introduction, one of the things that we experienced was the same event hit us in central southern England and then hit us in the north-east of Scotland. Both areas are very similar. The Aberdeenshire area is very heavily wooded, as is the south-east of our patch. The difference in terms of damage was quite incredible, and the thing that made the difference was the ground saturation. We did not have the same ground saturation in Scotland, so we saw a lot less damage. The damage in our English patch was about five or six times the amount that we saw in Scotland, and interestingly, it was split east-west. 83% of our customers were off in the east of our patch in central southern England, and that is where we took the brunt of the winds. What we saw, which, again, is very unusual for an event like this, is big trees—60 foot to 80 foot trees—coming across whole, with the root ball. They were in poor foundations. The ground was that saturated that it was not trees snapping—it was the whole thing coming across. Trees that you would never consider would ever be a danger were being blown over, whole. The difficulty you have is that the worst affected areas of the network were also the worst affected areas in terms of access. Where you have ground saturation and flooding, it makes it hard for us to get through. In fact, we did a repair from a boat to access some of our poles in a field. Our tree-cutters reckon they did 350 hours of road cleans—trees on roads—just to get through to some areas. You are battling through some quite severe conditions just to be able to get on site and assess the damage. It was quite localised, the worst of the weather to the south-east of our patch.

Albert Owen

First off—I speak as a layperson—you mentioned that the whole network was out. Isn’t much of the network simply substations that trip and need rebooting, or whatever the technical term is? A lot of those were done fairly quickly, but there was a slight breakdown in communications, and people could not inform you, or you were not informing them. Was that part of the problem?

Mark Mathieson

The way you have described that automation is exactly how it works. On an overhead network, you do get a lot of debris that may blow into the network when you have high winds, and that will cause a temporary fall. What happens back at the substation is that it will switch the network off. I am not trying to get into too much technicality, but you want to limit your current so that you do not damage equipment. It will then try the network back in automatically, so there is no need for communication. The actual kit itself does it, and it will give it two or three shots within three minutes to see if the fault was of a technical nature. If you take the 620,000 that I described who were off, we reckon that 408,000 came back on within that two or three minutes just through that alone, so over two thirds of the customers who were impacted by faults came back on within that very short duration.

Albert Owen

That is useful. I wanted to concur with what has been said by a number of you paying tribute to the front-line staff going out in very adverse weather to do their work, with the dangers that that entails. I have to say, most of the United Kingdom knew these storms were coming. On each and every weather forecast and in the news, we were told we were going to get some storms, and we had them very early on in December in many places as well. What contingency plans did you put in place in expectation of this? We knew it was coming. The severity was there; it was almost in line with the forecasts. What sort of plans did you have in place?

Basil Scarsella

We have a tried-and-tested system that comes into play when there is an emergency such as that. You are correct, we knew there were storms. We have a methodology that estimates the damage expected on the network, based on the wind speeds, and we did that, but the wind speed and the weather forecast escalated significantly on the Sunday. It went from 40 to 50 mile-an-hour winds on the Friday to 50 or 60 for our area, and escalated to 70 to 80 on the Sunday. Notwithstanding that, we managed on Monday, when it hit, to have all our work force pretty much on deck, and our estimation of the damage was pretty accurate in terms of the extent. What we did not estimate accurately was the duration of strong winds, as I said earlier, which resulted in significant, more severe damage. This was a national storm, as we heard from our colleagues, and it lasted over two or three days. There is a well-tested mutual aid system that enables any of us to call on our colleagues to send additional resources. For good reasons, because of the severity of the storm and the national nature of the storm, we were not able to provide additional resources to other networks, or indeed to receive additional resources. There is a combination of the severity of the storm, the national nature of the storm, and—

Albert Owen

You had a robust plan in place, and you feel that that plan worked?

Basil Scarsella

Absolutely, yes.

Steve Johnson

Could I add a little on preparation? This was a prolonged holiday period, and certainly in Electricity North West, and I think in the other companies as well, we make sure that the network is backed up to as close to 100% as it can be. We do not carry out any planned maintenance or planned construction work over that period, and we prepare. That means that of course some of our staff were on holiday as well—it is the holiday period—but we make sure that at least 50% of our operational staff are in. Our control centre staff and our contact centre are fully manned. Crucially, we make sure that if events do happen, we can call our staff back in. You are quite right, we were forewarned about this weather event. We had very good information from the Met Office. We were able to ring around our operational staff a full 12 hours before this hit. We had the resources, from both our own staff and our contract staff, prepared and ready to go. The systems were robust. They worked throughout. We deployed in the right way, which is why I think we managed to get so many of our customers back so quickly, but it is about the preparation.

Frank Mitchell

From SP Energy Networks’ perspective, with our geography, typically, we always expect the worst, because we usually get it four or five times every year. First of all, before we even get to preparation for a storm, we invest in our assets, particularly those most exposed to weather, to minimise impact to start with. That is why over 98% of our customers were unaffected by some of the more significant weather we have seen last year in the UK. However, we know also that our customers rely on us all year, but never more than in a festive period, so we sat and looked at the risk profile of weather coming up towards the festive period, and I sat with my customer services director and my operations director and locked down a plan on 19 December that gave us up to 800 front-line staff available every day, all the way through the festive period, right through to 7 January. We would normally have additional staff over that period, but we went well beyond that because of the—

Albert Owen

Mr Mitchell, what do you regard as front-line staff?

Frank Mitchell

We have technicians, engineers, and local management in the local depots. We also have control centre staff, customer service staff who man the phones and so on, so up to that type of level. Just over two thirds of the staff are deployed in the field, with the remainder supporting that, including our logistics staff, who make sure that parts and so on can be delivered to site. That was put together and locked down by 19 December to make sure we could react to anything that did come along, as well as make sure that the network was in the best shape it could be to make sure that any disruption to our customers was minimised. We had a combination of contractors and staff, both on standby but also generally available. We also cancelled leave for management over that period to make sure we could respond at a management level.

Robert Symons

One thing that possibly was left out of that was the call centre staff. From our point of view, we were fully manned in our two call centres, one in Pegasus and one in Wales. Both those call centres can act together in tandem and take calls from wherever they occur in our service area. We also have about 200 staff who volunteered to take calls in emergencies, and we have ramp-up centres at other locations, so we were able to put more people in place, because it is very important that customers understand what is happening. Our average call answering time was 1.6 seconds over the period. Over 99% of customers were answered within 20 seconds, and we made about 4,500 proactive calls to make sure that customers realised it if the restoration time had altered; we put them back in the picture. The last piece is to contact those customers who have special needs on our priority service register and make sure that they are okay. As well as doing the work, you have to think about how you communicate to the customers who are ringing in.

Chair

We will come on to that point in a moment.

Albert Owen

We will come on to communications shortly, as the Chair suggests. On the staffing level, I think this is important, because the reports that we have in the newspapers do not reflect that. Mr Johnson, you said 50% of your staff would have been on duty over the Christmas period anyway and that you have contingency plans to call more people in. In percentage terms, could the other companies tell us how many people are off over the Christmas period? It is that type of industry where many people do have time off then. I have to question the 1.6 seconds to a call, because that is not the experience I get in any utility. It is pretty good if that is the case, particularly when people have electric phones and they have no power, so I am surprised that they can even get to you in the first place, but that is communication. Mr Johnson, 50%; what about the other companies?

Robert Symons

50%, and what we also do over holiday periods is double up on our standby arrangements—people who are contractually bound to come in. In terms of people who are on leave, 70% of those who were asked to come in came in. From a staffing and a resource point of view, I feel that we were well covered.

Mark Mathieson

Similar points: we set a 50% limit on operational staff, but also what you have for out-of-hours. We have a 24/7, 365-day business. You would have your standby arrangements. If you look at what you would typically have to deal with ops in any day, we would have 200 staff between the south of England and the north of Scotland. For that Christmas week, we increased that to 1,000, so that was fivefold. That ties in with other storms that we have had. It was a very good response from the staff. I do recognise those reports that you saw in the press, but I feel that we got a very good response from our staff.

Albert Owen

I heard people on the TV as well. It was not just the journalists in this instance. You heard individuals saying, first, they were having difficulty in contacting the companies and, secondly, that there were not sufficient staff.

Basil Scarsella

We had increased the standby to 75% during the period, but important—

Albert Owen

Sorry; you were reactive, then?

Basil Scarsella

No, in advance. The standby came in because we were expecting bad weather, but importantly, 80% of our front-line people came in on Christmas Eve, Christmas, and that Christmas-new year week, so we had 80% of our own staff all available and came to work.

Albert Owen

You are all telling us that you had a contingency plan in place because of the length of the Christmas holiday, and that your staff were all either contractually on standby or actually working?

Basil Scarsella

80%, yes.

Albert Owen

None of your staff get real time off, in which they can’t be contacted? You said 30% did not come back. Could they not be contacted, or did they not want to come back?

Robert Symons

Of the staff we asked, 70% came in. You also have to remember that from my perspective, of 133,000 customers, only 13 went off for more than 24 hours.

Albert Owen

Mr Mitchell, again, I know the area that you serve pretty well. It includes my own area in north Wales, and we were particularly hammered in early December by storms. Did you learn anything from that? Again, there was the forecast, so you were better prepared than you probably would have been in other years. We had lots of disruption to transport, and to the domestic and business sectors, in early December.

Frank Mitchell

That is right. The part of the geography that we cover does get much of the more severe weather in the UK—north Wales, and particularly around the Llŷn peninsula/Anglesey type area, as well as Scotland. We do review our performance in every storm as it happens, and it was a very severe storm. It took some time for transportation infrastructure to recover from it. We do review that and look at what we do. To go back to the question around staff availability, maybe I can answer that from our point of view. It is not necessarily about a percentage of staff; it is a percentage of appropriate staff for us, because there are particular skills to solve the problems. There is no point just having bodies for the sake of it. It was a very clear target for us to make sure we had linesman and engineers in, from a technical point of view, as well as our customer service staff to do all the call handling we talked about. In our north Wales area, of the staff on general availability, we had an 85% turnout, and in the south of Scotland area we had a 70% turnout. Of course, on Christmas Eve it was all done within the day. There was no issue. It was really overnight and Boxing Day into the 27th we had more damage. We did learn lessons from early December to make sure we had more engineers to allow us to issue permits, and we focused the resources in north Wales very quickly because of the geography of the area and the ability to get around that geography. The work we did with the local authorities in that area around road clearances and emergency services was built on some of the experiences from early December. We could get quicker notification of blockages to those authorities as well.

Albert Owen

Mr Mathieson, you said you recognised the press reports. Why do you think they were different from what we have heard today?

Mark Mathieson

I do not know. There were a few war stories going about and we did not know where they were coming from. We tried to find the source of them. Some of the things that were quoted to us were that staff were going home at 1 o’clock on Christmas Day so they could spend time with their family. It was just nonsense. I do not know if it was Chinese whispers or not. We were certainly out throughout that period, and I am really proud of what my staff did and how they turned out. They were getting impacted by these stories as well. You can imagine: they are out there, the weather is foul, it is heavy work, and what they are reading is that people are saying they are going home. Some of the feedback we got from our staff on the back of that was that they felt that the industry was getting a bad press.

Chair

Notwithstanding, I am sure, a lot of excellent work by your staff, from a customer’s point of view, if you are one of the thousands of customers who are off for several days, and you are saying all the staff responded to the best of their ability, it suggests that something is still inadequate. Maybe you should have been scaled up for dealing with more severe conditions than you were on this occasion.

Mark Mathieson

I would not say it was inadequate. I would say it was different this time. To give you an example, our mode of operation, because we run two zones, is when we see severe weather warnings like this, we transfer 300 to 400 staff between north or south or south to north. Quite clearly, we were not able to do that this time, because we were getting hit in both areas. Even after we were hit in the north on Christmas Day and cleared it up, we had another event coming in on the Boxing Day evening. Until that event had passed, we were not able to do what we would normally do, which is bring staff down from the north of Scotland to the south. We move our own staff about, and as an industry after that we then look for mutual aid. Again, this was the first time that I can remember that we could not provide that to each other because everybody was getting hit. I know it was Christmas week and I know that had a big impact on customers, and I really do empathise with that, but equally I think outside Christmas week this would have been unique and we would have still had those same issues; the whole of the UK was absolutely getting battered at the same time.

Albert Owen

In the future, we are likely, aren’t we, to get repeats of what has happened? They are happening more frequently. Can you honestly give assurances today that you have learned lessons from this period, and that for other extended periods of holidays, there is going to be sufficient cover and everything will be done to get people back on as quickly as possible? That is what people want to know—that you have learned from this. As the Chairman said, if you are sitting at home and you are not getting a response or whatever, you are not going to be reassured by what you said happened. What they want to do is to prevent it happening again in the future.

Basil Scarsella

From our perspective, we need to assess. As Mark has already said, this was a national event. The national nature of the event has not occurred for a long time. Mutual aid has worked very well in the past and I am sure it will work very well in the future, if the storm is localised. From a UK Power Network perspective, one of the things that we are now looking at is possibly employing more front-line resources to be able to respond. Part of the DECC review that has already been initiated will look at the impact of the change in weather events that seems to be occurring.

Dr Lee

Mr Scarsella, you mentioned that there is a methodology that you use in anticipation of a storm coming in. I am presuming that that methodology has mapped the weak points of your network, and therefore if the wind hits a certain speed you think, “That bit is going to get damaged, and so is that bit.” In view of that, is there some sort of strategy within your company—indeed, within all the companies—for trying to deal with those weak points for a more medium to longer-term view on this, instead of it being an exercise, and every Christmas we put a bit of Elastoplast on something?

Basil Scarsella

It is an interesting point you make about the weak points in the network, because we are still analysing the data, but we are a long way advanced in that area. The damage was not caused by weak points in the network as such, because our maintenance is up to date and we invest significant—

Dr Lee

How does your methodology work, then?

Basil Scarsella

It is basically that you assume that the network is in good shape, because maintenance and capital expenditure is up to date. Based on the wind speeds and the rain that comes through, we can estimate the number of faults and, with that, the number of customers that are expected to go out.

Dr Lee

You estimate the wind speed and the rain, but there are no weak points, so how do you estimate where the damage is going to take place?

Basil Scarsella

Based on the wind speeds, we know—

Dr Lee

No, by definition that means if there is a certain wind speed, something becomes weaker.

Basil Scarsella

We expect trees to have a big impact, so—

Dr Lee

By definition, if there is a particular cable that is more exposed to trees, it makes it a weak point, does it not?

Basil Scarsella

Not necessarily, in that there are—

Dr Lee

What I do not understand is that you must have a methodology that is based upon where you are more vulnerable to a break in your transmission.

Basil Scarsella

Yes.

Dr Lee

That has to be. I can’t think of another methodology that you could use that does not involve predicting where trees are going to come down or where cables may be slightly more exposed to the wind—or am I missing something?

Basil Scarsella

No. Based on past experience, and if we are aware of weak points, clearly we take that into account.

Dr Lee

So, there are weak points?

Basil Scarsella

Not that we are aware of.

Dr Lee

None of you have weak points in your network?

Steve Johnson

One thing that we all do is survey all our assets. In particular, in the north-west we have 13,000 kilometres of overhead line and we survey that. We understand the condition of that network very well. We capture condition-based data on all our above-ground assets. The point you are getting to is the right one, I think, because of course our overhead line networks are affected by trees, and all of us have tree-cutting programmes. I have 100 people in the north-west; all they do, every day of every year, is cut trees to make sure they are kept away from our lines as much as possible, but of course we do not own them. We have to negotiate that with the landowners. Some of them are protected trees, so we can’t simply just cut every tree within falling distance of our lines.

Dr Lee

Do you have any programme to put your cables underground? If not, why not?

Steve Johnson

I think all of us will have a programme to put some cables underground, but that—

Dr Lee

Is that the case? Are you all at this point—

Steve Johnson

Can I just finish? It will be limited.

Dr Lee

Why?

Steve Johnson

It is simply cost. In the north-west, as I said, we have 13,000 kilometres of overhead line. At a minimum, it would be 10 times more expensive to put a cable underground than overhead.

Dr Lee

10 times more expensive to install. You have just had to pay significant amounts of money to staff to come in on Christmas Day and the like. You have to pay to have the overhead cables repaired. Over what period of time is it significantly more expensive? How do you compare the cost? Clearly, if you put them under the ground, they are not going to blow down, are they, so you are not going to be repairing them for the next 10 or 20 years?

Steve Johnson

They are not, but the cost of doing that across the UK would be tens of billions of pounds, and we have to look at the impact on—

Dr Lee

Yes. I am not suggesting you do all of them. What I am trying to get at is that you clearly know that there are certain parts of your network where, if winds reach a certain speed, cables are going to be affected. It is not all of them, but can we not afford, as a nation, by some mechanism, to put those cables under the ground? That is my point.

Robert Symons

I think it is more widespread than that. Once you get above—

Dr Lee

Can’t we start?

Robert Symons

Yes. Principally, where lines have been undergrounded, we have done so from an amenity point of view, rather than from the point of view of resilience, which is the point you are making.

Dr Lee

So you are not putting them underground because of resilience?

Robert Symons

We are not putting them underground principally from a resilience point of view, because when you do the cost-benefit analysis, which you are alluding to, it does not—

Dr Lee

Over what period of time, cost-benefit analysis?

Robert Symons

I would say over any period of time.

Dr Lee

That does not make any sense. Come on. You could take a 20 or 30-year view on this. From a national perspective, is it about national resilience, so that people do not lose their power, or is it because within your companies you cannot take such a long period of view, because you have other incentives not to?

Robert Symons

At the end of the day, it is customers who pay the bills, and when we submit a business plan, we have to do a cost-benefit analysis on everything we do to make sure that—

Dr Lee

Over what period of time? If you look at it over a year and say you are putting it under the ground, yes, it is hugely expensive and prohibitive, but if you are looking at it over a 30-year period, it becomes less expensive to do.

Robert Symons

We do look at it over that period. We are just submitting our business plans for the 2015 to 2023 period. We have to give a high-level overview of the following eight years. In fact, we look at the strategic investment in our network 50 years out, so we do look at it in that kind of time frame.

Dr Lee

Do any of the plans you have all just submitted include an approach to putting some of the most vulnerable cables under the ground?

Basil Scarsella

Not a significant amount. 75% of our lines are already underground, but when we look forward, there are different technologies partially to protect the network from falling trees; there is what is known as aerial bundled cable, for example, which is one cable rather than four cables. It is more costly than the traditional method, but not as costly as underground. We have 25% of our lines above ground, but there is no significant plan to underground that 25%.

John Robertson

I would like some figures from you, but you will have to write to me. I would like to know how many members of staff you had on call for Christmas 2013, and I want the same figures for 2011 and 2009. I want to know how many people worked as well, so who you had working those days, and the numbers that were not available, and that should allow me to work out how many engineers you had available. That would be very helpful. You have all talked about winds and everything, yet one of the biggest problems—I saw it from where I was—was flooding. What was worse, flooding or the high winds?

Steve Johnson

We were not affected by flooding.

Basil Scarsella

From our perspective, there is no question. As far as our business is concerned, it was winds. Flooding contributed and made it more difficult to access the damage to the network, but there is no question: in our case, it was the weather.

John Robertson

That is very interesting.

Robert Symons

Also, we have undertaken various flood prevention schemes around some of our major substations, which avoided some of the things we saw with the massive flooding a few years back. There has been significant investment in flood prevention around major substations.

Frank Mitchell

Just to add to that, we had very little impact directly from flooding because of that investment. Also, we have operational tools that we deploy if we see the risk of flooding, such as barriers and pumps, and these worked fairly successfully with a very limited impact from flooding. What we did have, however, was requests from some of the emergency services to disconnect areas. They wanted them disconnected because their staff and people were in areas that were flooded and they wanted to make sure there was not any risk through electricity and water coming into contact. There were some events like that. We worked with emergency services at their request to disconnect some small villages from time to time as they were coping with some of the flooding issues locally.

John Robertson

In relation to planning for this, I had a look at the Met website and they give me pretty excellent detail on where the winds are going and everything else. What I can’t understand and what ordinary people don’t understand, I think, in all honesty, is why you have not used the word “sorry” yet to all your customers who were out for a lot longer than they should have been, and to those who maybe should not have been out at all. To say you do not have any weak points and things like that gives an impression that everything is fine, yet we know from the figures you have already given us that there were tens of thousands of people who were out for a long time. I am not going to ask you to say sorry now—it is too late—but I want you to bear in mind that when you come to a body like this, it might be quite good if, when you are given the opportunity to talk, you mention that there are people involved in this and it is not just about what you have done. Let me ask you another question. You say you could not give mutual aid to each other because you were all too busy. Who else do you turn to if you have a problem, if you can’t help each other? Who do you turn to?

Basil Scarsella

We turned to our contractors, and they responded when we asked them to give us resources.

John Robertson

Did you look at any other companies that maybe work in overhead areas, such as BT or something like that?

Steve Johnson

This is very specialised skill that we require from our engineers and linesmen, taking many years of training, so we can’t simply switch resource. Like everyone else, we make sure when we plan for these things that we contact all our contract partners as well as our own staff, and they were available in many numbers, and we did make use of them.

John Robertson

The reason I ask is because Mr Scarsella mentioned trees being a big problem. I worked for BT for 31 years, and we had tree-cutting people as well. It was a company that could have been contacted to give you a hand, and I am sure, under the circumstances—Christmas and everything else—they would have gone to help you. Do you ever try to think outside the box? In other words, don’t just think of yourselves and your own little company; think of the bigger picture and how you can get those people in service quicker.

Mark Mathieson

I think the BT point is a good point. One of the resources we do use is street-lighting contractors.

John Robertson

Exactly, yes.

Mark Mathieson

What I would say about BT, and you will know this, is that they were affected and were busy during that period as well. They had a lot of cables that had come down. Yes, we can look at it. I would suspect they would be as busy as we were dealing with this sort of thing.

John Robertson

This brings me to my main point that I wanted to ask you about—planning ahead. I have just given you these things, speaking off the top of my head. I think there was a distinct lack of planning here. I think you had a rough idea that you would need x number of men, but did you have them in the right place? Where were they? It is all very well to say you had plenty of people and you got them in, but were they in the right place? Could you have organised yourselves better? I am in the central bit of Scotland. We did not have many problems. We had high winds and everything else, but we did not have the problems that other colleagues had, so it could have been a case of moving people from where I was and from other companies to get things done better and quicker, and to make the public feel valued by your companies. Unfortunately, gentlemen, I do not think you did that. Having said that, I accept the problems you have, and I do understand them, and I understand the difference between underground and overhead and the problems you have there, but there are times where you seriously have to think outside the box and use other people to help you.

Chair

I have to say, after 45 minutes, the tone of this discussion and its content has been utter complacency from all of you. The trade body can’t provide the most basic information on a totally predictable question. As Mr Robertson has just said, you have lacked any expression of real concern for your customers. I have to say this attitude is absolutely typical of a monopoly, particularly monopolies whose charges are not very visible to the customers who have to pay them. If you think this is going to impress the members of the Committee, you are going to need to step your act up quite a lot in the next half-hour.

Christopher Pincher

My question follows on from John Robertson’s. Mr Mathieson, much earlier on, you said that one of your challenges is not just resolving the issue at the point of failure but getting to the point of failure, because of fallen trees at access points and the like. Although you have been clear about the way you have organised and deployed your resources, how do you liaise with other agencies like the police, the fire brigade, the Forestry Commission and landowners? What are the demarcation points in responsibility between you and them, and how is that responsibility discharged?

Mark Mathieson

When you have events like this, everybody is in it together, so the traditional demarcations that you would talk about in “business as usual” disappear. We were in touch with all the local planning authorities and the regional forums. We were part of that. To take you back to some good examples from the past showing how we have built on that, Scotland is a very good example of where we have had issues before. As a utility group, we sit on SGoRR, which is the Scottish Government’s equivalent of Cobra. It is the utilities and roads regional forum. We know there is a very specific issue in Scotland: if roads are blocked, and the way that the west of Scotland is—there is usually a single road to someplace or a 10-hour deviation around it—it is very important that we work together. We help each other out. Our tree-cutters, if they can’t get through to the fault in the first place, can be cutting the trees to clear the roads as well, so we do co-ordinate. We do co-ordinate with them when there is snow as well to make sure that when they are ploughing roads, they are getting us into areas, where they can, that give us the biggest hit. It works well. It is something that we have developed over the years and something that I believe we should develop with those agencies. More and more of these events are multi-agency events. Everyone is involved in them.

Christopher Pincher

If that process worked well, and people are going out to cut trees and clear access points, so that you can get to the point where the power cables were down or damaged, why wasn’t power restored much more quickly in those places?

Mark Mathieson

I think it was just the impact of the event. It was a massive event. I have heard it quoted elsewhere that it was the stormiest since 1969. Certainly, we have not seen damage like this in the south since the early 1990s, or even the great storm of 1987. I have been in this industry 25 years. We, as an industry, clear these events up much quicker than we used to, but we also recognise the impact that has on customers, and we are sorry. I did go out and communicate with customers that we were sorry that they were off. We recognise that customer expectations in terms of how long they should be off for are reducing all the time, and we need to keep up with that. To get to the area and fix faults, in circumstances when you have damage and devastation like that, unfortunately takes time, but that is where we go the extra mile and do things with customers. I know it is not the same as being at home with power on, but we were offering accommodation and hot meals.

Christopher Pincher

Is there anything that any of you think you can do with those other agencies to improve the response times or to improve the response level, so that you can get to the points of failure more quickly and then resolve them, or are you happy that your multi-agency response is as good as it can be and cannot be improved?

Mark Mathieson

One of the things is going out to every local and regional forum and sharing our lessons learned with them, because you always learn lessons. This industry has learned lessons. I know that it seems a long time that customers were off, but go back 20 years. That would have quite easily been two weeks. The only way we are going to improve is to learn the lessons. We will learn the lessons and we will share those learning points with those partners, and then build those working relations if this happens again for the next time.

Sir Robert Smith

On the maintenance issue, who sets the industry standards for the quality of the poles, the corrosion of the stays and those basic things? There is a concern from the public that if there was more maintenance then the system would be more resilient.

Mark Mathieson

One of the things we have developed over the years is much better techniques for judging how good the assets are. I remember, when I first started in this industry, the way you tested if a pole was rotten or not was you sounded it with a hammer, and if you got a dull thud you had to replace it. In 20 years we have developed a lot of techniques. We now use ultrasonic tests on poles so we can see where the rot is. We have interventions on poles, so that we can strengthen poles rather than necessarily changing them, which is obviously much more sustainable. We have developed a suite of techniques. When you look at the performance over the last 10 years, our system performs much better than it did. Take the south system: the figures are 17% less in the number of faults and 33% less in the duration. The system is improving. I know that we probably do not get that story out there, but the system is improving, and it is all down to developing those new techniques and having better interventions.

Sir Robert Smith

Can I just clarify, though, whether there is an industry standards body?

Mark Mathieson

There are industry specs that we all work to, yes.

Sir Robert Smith

Who sets them?

Mark Mathieson

We set the specs, and the owner of the specs is the trade body.

Sir Robert Smith

How is their compliance or their application monitored?

Basil Scarsella

Through Ofgem, we are required to measure the health and the integrity of the assets on a regular basis. Just supporting Mark’s comments, in the south, London and the east, in our networks, what is the test of whether the quality of the network is improving? It is really how many customers are off power for over a year, and in our case we have seen a 40% reduction in the number of customers who are off, without power, during the year. The number of interruptions is also significantly reduced by something like 30%. All of that is because the maintenance has been kept up to date. In fact, it has been increased. When you get an event like the one that we have been talking about, the question rightly should be asked, but if you look at the performance over a 10-year period, you will see that the integrity, quality and performance of the network has improved significantly.

Sir Robert Smith

Will there be a storm report on the nature of the faults, with the statistics?

Basil Scarsella

Yes.

Sir Robert Smith

When will we see that?

Basil Scarsella

We expect, in our case, within two months. By the end of February we should have a report.

Sir Robert Smith

That will break down whether it was tree-cutting that was the problem or the actual integrity of the line?

Basil Scarsella

Yes. The cause of every fault.

Frank Mitchell

From our perspective, I think it ties down to the issue that Mr Lee raised earlier. We have a particular focus on resilience, maintenance and inspection to make sure we minimise the damage. On the point made earlier, I thought I said earlier that we know what customers expect of us, particularly in the festive season. For those who were impacted, it is unacceptable and we apologise for that, but we do keep on top of our maintenance specs. In particular, we also look at our resilience, where we have higher specs. From 1998, when we had a significant storm in the north of the UK, we have had a programme of work looking at resilience-specific investments—not necessarily undergrounding, but a higher spec for lines and a higher spec for poles, and also a higher spec for tree-cutting. We have a resilience cut. We have a falling distance as well as a safety cut. We spend £20 million a year on tree-cutting and inspection. One of the critical factors, we know, in how successful we are through any winter, is how up to date we are with the tree-cutting programme, as well as our general maintenance and inspection. It is a key focus for us to make sure, ahead of any winter, that we are well on top of that, so that we minimise damage. Even with that, there are always lessons to learn. We review after every winter, did the plan work and where we can improve upon it, regardless of what is in the public eye. That is a programme of work we already undertake every year. For this specific festive period, although we had probably fewer impacted than many others, we will also be producing, and have produced some reports already, a complete post-event analysis by the end of January. We are already supplying information to Ofgem and DECC on some of the outcomes of that, about the areas we think we will be focused on going forward. We will have that, and that will come from us after the end of January. The issue I want to come back to is that it is a continual battle on weak points and resilience. You always look at your next weakest point. It is a continual programme we have had running since 1998 to try to improve that, and it is an area that we continually focus on.

Sir Robert Smith

Will the statistics show, where trees were involved in an incident, where the landowner had refused you permission to do what you wanted to do to the tree?

Frank Mitchell

There are areas where that is a problem. We have had trees travel quite a distance over fields because of perhaps some action that has been taken by the Forestry Commission, where they have been harvesting some trees and left some weaker trees in there that we are unaware of. We get debris travelling hundreds of yards. Indeed, one of our customers phoned from north Wales, apologising for the fact that his barn had flown across a field in 110 mile-an-hour winds and hit a line. We will analyse all these aspects coming through, but about 85% of the impact we had was debris out there that impacted our assets, and we will be trying to clarify the exact position in the report we do at the end of January.

Sir Robert Smith

Finally, in 2010-11, you only spent 73% of your allowed expenditure on the network. Do you think that is a sign of not investing enough?

Mark Mathieson

Not at all. It was a five-year review. That was the first year. We had been cut back in allowances, so we were looking at how we discharged that maintenance and that investment programme. We made it quite clear that we will spend between 90% and 95% of those allowances over the five-year period, the 5% to 10% being the cost-efficiencies that we are driving out of the business. Those are shared with customers, and the customers keep them going forward. We always said that we were taking a different approach in year one, but we would ramp up for the price control review period, which is what we have done. I have to say that most of the things that we were looking at again were round about ground-mounted substations—the big kit. It was not in tree-cutting or overhead lines.

Mr Lilley

Answers are beginning to emerge to the very fundamental question that I want to ask, which are: what caused the interruptions? Was it flooding of substations? It seems that was much less important, but from the media coverage I thought that was half the problem. Was it trees falling on lines? Was it lines themselves and pylons being blown over? You have mentioned debris. Were there other factors that account for the interruptions? Also, give us a picture of whether it is on the transmission lines or on local distribution lines, or if that is a valid distinction.

Basil Scarsella

In our case, it is clearly the local distribution lines. There was some damage to our assets, but by any margin, the most significant was from trees and debris—trees falling on our power lines.

Steve Johnson

It is similar for us. It was not an issue on the transmission voltages. It was the 11,000 volts and below. There were very few issues with the assets. It was trees falling into the lines and windborne debris.

Mark Mathieson

Same again. We talked about the national statistics and we will have the final view, but when I looked at this storm, the number of broken poles was very low. We only had 14 broken poles in the south of England, despite that event going through, so that is low. The rest of it would have been a mix; there were trees coming through the lines and, equally, as I think Robert said earlier, in high winds, you get conductors clashing and causing damages there, but that will all be brought out in the stats. We have to pull all that information back from the field, collect it, and put that together. You are right: there was a big story about flooding. While flooding was causing us issues with getting about, we were not having issues with flooded substations during that period.

Mr Lilley

That half-answers my next question: to what extent was it flooding and to what extent was it wind? We had far worse floods, certainly in my area, in 2000, I think it was, where we had lakes formed, and rivers reappeared that we never had, for weeks and months on end. That did not happen this time. Again, we have had worse winds than this in the past. You mentioned 1987. I think there were some more in the spring of 1989 and 1990, which to my recollection were worse than the winds this time. Why was the damage apparently worse this time than when we have had more severe winds in the past, or is it just that our memories of the electricity interruptions fade?

Mark Mathieson

I think there is the memory thing there. Certainly, 1987 was probably the biggest event that I could find any reference to, and this event was not as big as 1987. There were a few, I think, though again, I was not about at the time, in the south that the guys quote—1990—like you do. This event was slightly bigger. In time, memory does fade. One of the things I do recall from my time in the north of Scotland is a couple of weeks to clear up big storms was not unusual 20 or 25 years ago. If you went further back to 1984 in the north of Scotland and read the fault reports, it was even longer sometimes. We are getting much better. Memories do fade. It does feel that we are seeing much more stormy weather. Back to your point about flooding, one of the things after this event, around about Berkshire and Oxfordshire, we did have some real serious flooding around Oxford, Reading, the Thames and the Kennet, which created those big lakes, but we were able to manage the electricity network through that.

Mr Lilley

Have there been storms of roughly this intensity in any of your areas at times other than Christmas? In other words, to what extent was the problem exacerbated by people’s very legitimate desire to have Christmas with their family at home, where that was suddenly interrupted because they couldn’t cook their turkey or whatever? Worse than that, for several days they were without heating and lighting.

Basil Scarsella

There is no question that Christmas has had an impact, thinking of the impact of the storm, but you referred to previous storms. In October we had St Jude, which hit our eastern network, but as I said earlier, it was short and sharp. It lasted for about an hour. It was concentrated in a relatively small part of the network. We were able, for example, to move our resources from the south to the east, because the south was not impacted. That was nearly a million customers off and there was very little publicity about that. There was lots of publicity on the storm, but I am happy to say that electricity did not get anywhere near the mention nationally or locally that it had over Christmas. You tend to think that this was a significant event—it was national and it was Christmas. I did say earlier that we feel sorry for the customers, and especially the ones that were off over Christmas, because it is hard to believe how difficult it would be for families who might have had guests and so on when the power was off. We do feel for our customers, but it was a national event that had an impact that we have not seen for a long time.

Mr Lilley

You had a million customers without electricity at the St Jude storm, and 460,000 this time?

Basil Scarsella

That is right, yes.

Mark Mathieson

Looking back through our records, I can’t find a big storm occurring at Christmas in the south. We might have had busy days, but not a big event like this. When I looked through the north of Scotland, our previous big event was 1995. There are times during Christmas when we are busy, like we were this year, but for big events that have taken a number of days to get customers back on,1995 was the one I remember in the north of Scotland.

Sir Robert Smith

Can I go back to the tree-cutting? If you think a tree needs cutting because it is going to pose a risk to your line, what rights do you have to cut that tree, or is it negotiation?

Mark Mathieson

It is negotiation.

Sir Robert Smith

Is there any arbitration system for it?

Mark Mathieson

There is, but it only allows you to cut it once, and then you have to go back through the whip again when you need to trim it back the next time. Trees need to be cut every three or four years just to keep them pruned back away from the lines.

Sir Robert Smith

How is the balance now? How often is it, if you go in and say you need to do it, that people say, “That is obvious; get on with it”?

Mark Mathieson

I would say it is mixed. We do have issues, but other landowners do allow us to do our maintenance. It is a mixed picture.

John Robertson

I am somebody who had this problem in his previous job. When you have a landowner who will not allow you to cut a tree—and I am sure it happens—and it damages your lines, do you charge them for the repair?

Basil Scarsella

We don’t, no.

John Robertson

Can you charge them, or you just don’t charge?

Mark Mathieson

Your line is probably on his land, and therefore the first thing you are going to get is a termination of the wayleave. The way you have to do it, John, as you will remember, is try to go out and persuade and cajole. You use all the tools in the bag. In some cases that is difficult.

John Robertson

If it is a safety hazard—dangerous hanging or whatever—you do not have to get agreement to cut it down.

Mark Mathieson

You are going back to the electricity supply and quality regs. The safety hazard one is more for kids climbing up there, so if kids could climb up and get out on a branch, yes.

John Robertson

If it is a tree that is hanging at an angle and it is dangerous, and you are worrying about it falling on top of your line, which could come down on the road or whatever, you do not need to get permission to cut that.

Mark Mathieson

From a landowner, we do, yes.

John Robertson

Do you?

Mark Mathieson

Yes.

John Robertson

Sounds like one for the Government.

Dr Whitehead

We received quite a lot of correspondence from customers affected by the outages. One of the things they felt was very difficult was their widespread inability to find out what was going on, the likely duration of the power cut they were suffering, and what was being done to deal with that. What measures did you all take to ensure that customers were provided with the most up-to-date information that they could have during the disruptions?

Basil Scarsella

We certainly had the problem you describe, Alan. One of the early lessons is that we must improve communication with customers—not necessarily the 460,000 customers, but those last 3% or 4% who needed to be restored. In lots of cases, because the damage was across various levels of the network, while we believed that by fixing one level—the high voltage, for example—it will fix the problem, it was not fixing the problem, because there was damage further down in the network. One of the lessons for us, in terms of assessing the damage, is it must be more thorough and must go all the way down to the house, basically, rather than focus at the high-voltage end.

Dr Whitehead

Are there any other experiences of this?

Mark Mathieson

Yes. One of the things we have done over the years is look to increase the number of channels where we will share information on power outages. Quite interestingly, when you went back five years ago, nobody was using any digital technology because obviously the power was off. Now, with smart phones and iPads, you find a lot more people are connected. We are starting to develop a suite of tools that can get the information out to the customer quicker. We gave good information in some cases and we have had some good feedback on that—things like sending text messages. We sent 103,000 text messages during that. Equally, I do recognise that in some cases we were not giving the information quick enough, and we have to find a way to get out to site. You need to get out on site and assess the damage to be able to give a time by which it will be repaired, and we feel that that is one of the big lessons to be learned from this big storm. We launched a consultation the week after the storm, asking stakeholders, including customers and staff, what they thought went well and where they think we could improve for the future. One of the key aspects of that is the communication piece, and we will take that feedback from customers. We will look at what the feedback is and then we will build a plan to deal with that.

Dr Whitehead

One thing that has been communicated to me as far as Southern networks are concerned is that you have a system that enables people to find out whether their outage is recognised as being accommodated and dealt with, but that system enables something like 50 outages to be recorded. In a number of instances, people felt that their outage did not exist because it could not be accommodated within the system that you had, as you had overtopped the 50 outages. Therefore, when people went to see whether their particular outage was on the system or not, it was not, and they felt completely neglected and overlooked, even though technically their outage had been logged and was being dealt with. Is that right, or are there different ways?

Mark Mathieson

Yes, I know the one you are talking about. We developed an app for smart phones and iPads called the Power app. We rolled that out last year. We have our fault management system sitting in the background that we are using to manage faults and give the customers information, and what that app is trying to do is take that and put it in a very user-friendly way to customers. Basically it is a map of our two territories in the UK and there is a pin on it, and if you tap on that pin it will give you a number of status messages—when the power went off, when we expect the engineer to be on site, when the next update is going to be, and when the power is going to be back on. It goes through that. That works very well for business as usual. What happens, though, with that app when we have events such as this is that the map just gets obliterated. You cannot see. It is not giving information. We are looking at the development of that app to give better information during business as usual, but equally making it work for us during these big storm events. That is a bit of development work that we have on. That Power app was something new we introduced last year.

Dr Whitehead

Is that something that other networks dealt with? Do you all have apps that don’t work?

Basil Scarsella

We have a very similar system to SSE, but during the storm we had 2,400 faults, and when you looked at the map it looked as though the whole region of 20 million people was off. It needs to be refined to cater for emergency storm events.

Dr Whitehead

How far into the extended outages that you had in your particular region—UK Power Networks, Mr Scarsella—did people get the information across to them that it really would take several days to restore their power?

Basil Scarsella

We made 20,000 outbound calls, but there is no question but that for a number of customers, the information we were giving them just was not correct because of the problem that I described with the network. Like I say, we had 200 people coming in and making outbound calls to try to reassure the customers, especially the last few thousand, that we were working on repairing the damage, and that power would be restored as soon as possible.

Frank Mitchell

We have a social media strategy as well. Also, in making sure that we can tell customers the best information that comes from our front-line staff, information is reviewed to make sure that it is as accurate as it can be, and we put that out. Customers initially get an automated message that is down to that granular level where we can identify them, and a slightly higher one if we do not have their telephone number on our system. We also, for all those customers, give them the ability to stay on and talk to an agent. If they want more information or they have a question, they can stay on the line; they do not get disconnected. They can stay on and talk to an agent specifically about their issues. On top of that, as regards our vulnerable customers who are on our priority services register, from the very beginning of a storm, where we identified we have vulnerable customers, they are proactively contacted and given a dedicated line with dedicated staff, outwith the standard number, because we know those are the customers we want to focus on early to make sure their welfare is being taken of. Over an extended period, we typically would see in any of our restorations an 85% accuracy rate on our initial estimation, because things can be dynamic in faults. An area of ongoing improvement we have in our business is to improve that 85% initial estimate, but for those that then change, we try to outbound call them, and usually agree the form of that, whether it is a text message or an outbound call. Where we see the situation changing from what we have initially told customers, we do our best to contact them to tell them the situation has changed. We do not get 100% of that correct, but about an 85% level is typically what we find, on accuracy of our initial estimate of restoration time. That is an area where we try to have ongoing improvement in the business. We manage our vulnerable customers individually and we outbound call them. Typically, if there is an extended period over which a customer is cut off, we are starting to do them outbound as well, because we realise that customers become more vulnerable the longer they are off supply. We try to make sure we focus on their specific needs and their welfare and keep them up to date as proactively as we can.

Dr Whitehead

How did you deal with, and how should you deal with, the question of what you might say are sequential reconnections? That is, you were putting people back on the system quite often in blocks, and people who did not have very much information were under some circumstances saying, “I can look out my window and I can see over the valley that everyone has their power back there, and I have nothing here”, and yet they were getting no information about why that was the case or what the circumstances were that caused the power to be back on in one place and not on in another. Is that something you regret not dealing with as well as you might, in retrospect?

Basil Scarsella

The restoration strategy is first, through automation, to restore as quickly as possible. Then we look at high voltage, which is where the bulk of the customers will be impacted, because we want to restore as many customers as quickly as possible. In the US, for example, once they have restored the high voltage, any phone calls, any messages received, are wiped and they ask their customers to ring back if their power is still off. They get told in the first place, “Your power should be back today because they are fixing the high voltage lines. If it is not back by the end of today, please give us a call back”. That is something that we need to look at. My preference would be to assess the damage all the way down to the individual premises and provide them with the accurate information, rather than ask them to ring back.

Dr Whitehead

Do you think you could reasonably guarantee under future circumstances that if a person is actively seeking to find out whether they do have a cut, an outage, that their outage really will be on your systems and they will get accurate information, and that that information will be updated reasonably well as an outage progresses? Are you able to say that either you are going to do that or your systems enable you to do that now?

Basil Scarsella

I think, from our perspective, what we need to do is strive to improve. I do not think we are in a position today to guarantee that the next time there is a major storm every customer will be able to get accurate information about the time of restoration.

Mark Mathieson

For us, it is something—just exactly as you said—that we have identified. As I have said, what we have developed works well on a business as usual, day-to-day thing. We are just scaling that up to make that work in storms and deal with that multiple complexity, so once you have that information back from the field, make sure it gets targeted to the right people. There is nothing worse than getting information that is slightly wrong, that you are off and you will be back on in three hours and you are already back on. It is about making sure that it is targeted, and that is what we are working on.

Dr Whitehead

Do you think that, as the Secretary of State suggested, some form of 999 emergency number for power cuts might be helpful? Perhaps, Mr Smith, you might want to reflect on that. Would that be something that the district networks themselves might collaborate on? Do you think that would be a better system than we have at the moment for establishing the reliability of the information and the ability of people accurately to fix what they objectively were in for, as far as the outages are concerned?

David Smith

We carried out a feasibility study in 2013, looking at the so-called three-digit number routed to DNOs via call line identification for fixed phones and geographicals for mobiles. There are a number of pros to doing that. Clearly, the single number enables the location of mobiles to be sent, allowing routing, and it may be possible to share some calls across companies. There are also some issues we need to look at, such as capacity and 24/7 availability. In particular, the work we are doing at the moment is looking, with Ofcom, at agreements that would need to be put in place for that, and also with BT and mobile operators. It is a piece of work that has started. We are now moving that forward. We are having a look at it. We have been very rigorous within our emergency planning managers group, and again also there are costs in there. It is a piece of work we have started and it is something that we are carrying forward. When the Secretary of State mentioned it, we did caveat it. It is in its early stages and we are looking at it and we are seeing how best, if it is possible technically and money-wise, to take that forward.

Chair

Sorry to interrupt, but if it is in its early stages, what did you say to the Secretary of State? He made this statement on 8 January, two weeks ago: “Householders will in future be able to get help in power cuts by dialling an emergency 999-style number”. You have just told us that they are not going to be able to do that.

David Smith

What we are looking at is how we can get over some of the technicalities of this, and we said at the meeting that there are some technicalities around it. We need to work those through. We are doing that now. We have a piece of work ongoing and we are delivering that within the next month.

Chair

Mr Scarsella says that his company is not in a position, if there is another major storm, to provide that information. He told us that about five minutes ago.

David Smith

In terms of the three-digit system, we are looking at that, as I said, and we are looking at—

Chair

You are looking at it. The Secretary of State has announced that it is going to happen. You are saying you are looking at it.

David Smith

Yes.

Chair

Did you ring up and point out to his office that he was making a claim that was clearly complete nonsense? Did you do that?

David Smith

We had the conversation with the Secretary of State, and one of the things that we were very clear on was we need to do some more work on this. We need to get the final bits and pieces in place, and that was the key point on that.

Chair

He said, “Householders will in future be able to get help by dialling an emergency 999-style number”. You, as the trade body, are saying, “We are doing some work on it”.

David Smith

That is correct, and we will have that work delivered—

Chair

So, he was not telling the truth on 9 January?

David Smith

We will have that piece of work delivered back to DECC by the end of the month.

Dr Whitehead

Did the conversation go, “Secretary of State, we can’t deliver this over the period of time, but we are working on it”, and the Secretary of State said, “Well, that is great. I will go off and announce that it is ready to go”? Is that how it worked?

David Smith

Certainly, the conversation we had was we are looking at it, we are doing some feasibility study on it, and we are looking at how best, if we can implement it, to implement it.

John Robertson

Mr Smith, what do you need to do? What kind of work are you doing? It is not a difficult thing to do. Tell me exactly what kind of work you are looking at.

David Smith

At the moment we are looking at the detailed work with Ofcom and with BT and mobile operators.

John Robertson

As far as the technology goes, it is a computer that does all this work for you, and you just dial a number and it accesses. Your only problem is who answers the phone. That is your problem. Surely it is not beyond the wit of man and these gentlemen beside you to set up a call centre that will handle this problem. It is not difficult. It does not even cost a lot of money.

David Smith

We would have to get an agreement that the emergency system on mobile phones could be routed to that local area, so there are still some issues to work through with Ofcom about routing.

John Robertson

If the Secretary of State says it is going to happen, then that is his problem, not yours. Get him to sort that out with Ofcom. I would suggest that is his problem, if it is the mobile operators. In relation to the set-up of a call centre where people can get access to the information quickly through an emergency number, that is not difficult to do. Television and radio phone-in programmes can be done at the drop of a hat. This is the exact same thing and it is not difficult, as somebody who used to work in that area. It is not difficult. The problem is having the will to do it.

Chair

It is dependent on the companies knowing what the information is, though. We have heard from one of the biggest ones that they are not yet able to guarantee they can provide that information.

John Robertson

Can I ask a question about call centres? I can’t remember which gentleman—maybe you, Mr Symons—mentioned call centres. Do you have call centres in this country?

Several

Yes.

John Robertson

So, you have access to a call centre and it is local to your business?

Several

Yes, that is correct.

John Robertson

I do not understand why people cannot get the information quickly through your call centre.

Robert Symons

I think, talking about my own business, they did get information quickly. They got through quickly and we proactively contacted them when estimated restoration times were changing, through some of the things that we have discussed.

John Robertson

Once you do it, you can alter it.

Sir Robert Smith

How do people know who to call?

Robert Symons

The number is on the bill.

Sir Robert Smith

It is on the bill, separate from the supplier?

Robert Symons

Yes.

Frank Mitchell

However, what I would say to that is our own research that we have been doing says that there is a problem with awareness with customers about who to call, despite it being on the bill, even despite us, as a company, having written to every customer in the past to give them the number. When the situation arises, our own market research tells us that 36% of customers do not know who to contact, so we have an awareness campaign that we are actively doing just now to make them aware.

Sir Robert Smith

If you could solve this problem and get the three-digit number, that would—

Frank Mitchell

I am not familiar with all the technical issues, but I think the essence of it is what the Chairman said. At the end of the day, we have to make sure we improve the service for customers, and that is all about making sure everybody can give accurate information. I think that is the heart of it, and also what we are doing to make sure people are aware of the number in the programme that is ongoing. Right now, we have billboards and buses in north Wales, Merseyside and around the south of Scotland to make sure people know the number and who to contact, as well as writing to customers.

Dr Whitehead

To conclude on communications, I have two questions. First, if you have internal arrangements that enable particular outages to be lost in the system, having a 999 number that does not tell you about the outages that have been lost in any event, because you have not been able to get those lost outages back on to the system, appears not to be a great deal of use. Are you actively fixing that? Secondly, a good proportion of customers, despite the numbers being on the bills, make the reasonable assumption that they are with SSE or npower or whoever, and the fact that their power is gone is a function of that company’s supply to them. What sort of liaison do you have as network operators with the retail energy companies, so that there can be a reasonably clear line of routing of inquiries to the proper location? Would a 999-type number include those companies to which the customer, quite reasonably, will make the first inquiry?

Basil Scarsella

In answering your first question, I agree with you. It is the quality of the information coming back from the field that is going to determine the quality of the information that is given to the customer. That is the area that I mentioned earlier—one of the lessons we have learned out of the latest one, an area where we need to do better. In relation to the second question, which I think is the relationship with the supplier, in our case the relationship is very good with all of the suppliers, and if a customer rings the supplier, which often they do, it is rerouted very quickly. If it is a power outage, we route it to our call centre in Ipswich.

Mark Mathieson

The way the system works is every meter point is tied into one of our networks. It does not matter if that customer is switching or who the supplier is, because you also need to accept that the customer might have switched the day before. The supplier knows which network operator that customer is on, and is therefore either able to route the call straight to us or give the customer the number. That is the way the national system works. Through the meter point, it is tied to one of our networks.

Chair

Do you all recognise that the suffering of customers is greatly aggravated by giving poor information about when they are going to be reconnected, and the situation of someone who has been off for a day is made worse, not better, by assurances that it will be back tomorrow and it turns out not to be?

Mark Mathieson

We do recognise that. As I said, that is what I think is the real lesson learned for us through this experience. Operationally, we are proud of the staff. We recognise the suffering that customers went through, and again I am saying we apologise for that. We did give out good information. We need to give out better information to all our customers, and that is one of the things we are working on with our consultation.

Sir Robert Smith

When smart meters come, will they tell the distribution network that they are not getting any electricity, and will it obfuscate the need for small faults to be reported by the customer?

Several

Yes.

Sir Robert Smith

That is all built in, even though the meters are not part of the distribution system?

Several

Yes.

Ian Lavery

I share the views of the Chairman about the complacency this morning. I am amazed by it. What is being said is that there was a clear understanding that the storm was coming. You had the right staff, expertise, skills and adequate programming. So you did everything right, yet there was this basic catastrophe. I would suggest that you did not have everything right. I think you should share the experiences of the people who suffered greatly as a result of the plans you had in place failing, because that is what happened. They must have failed, or it could not have happened to the magnitude that it did. I want to turn briefly to the compensation. These people suffered greatly—families. Unfortunately, it was Christmas. It could be any time of the year. Yet industry standard payments for compensation are £27 for customers who are without power for 48 hours. It is an absolute pittance, and in my view it is a miserly amount. It is an insult to those people who are suffering greatly, and yet that is what we have on the table. There are one or two companies—which I will come on—that have said that they are considering or they will pay additional compensation. A question to Mr Scarsella. SSE Power Distribution have agreed they will make payments to any customer who was without electricity for any time on Christmas Day. That is regardless of the duration of the power cut. Will your company do the same?

Basil Scarsella

Absolutely. We announced that on Christmas Eve. We were the first ones to announce the fact that if any customer is off, even for a minute, during Christmas, they will be paid £75. I agree with you. Is £75 recognition of the suffering? No, it is not. But notwithstanding the fact that regulation does not require us to pay anything if a customer, as you correctly point out, is off for less than 48 hours, any customer off during Christmas will be paid £75 by us. We announced that on Christmas Eve.

Ian Lavery

What about the rest of the organisations and companies?

Steve Johnson

With regard to Electricity North West, while we did not have anybody off on Christmas Day, clearly we did have many people off on the 26th and the 27th. You are quite right, we could have gone for the exemption that said that just those 16 customers who were off for over 48 hours would get £27. We are not going to put that exemption in place, so any customer off supply for over 18 hours will be entitled to £54.

Robert Symons

As far as WPD is concerned, we had all bar 13 customers on within 24 hours, so most of our customers, the vast majority of our customers, were not off for a very long period, so we have not done anything on compensation.

Frank Mitchell

For SP Energy Networks, on the storm that came in overnight on Christmas Eve, we had all customers on on Christmas Eve. We had no customers off on Christmas as a result of that one on Christmas Eve, but we did have a storm overnight on the 26th and 27th. We have had a debate with a number of stakeholders about where we focus our financial resources. When we look at this issue, we recognise that people feel that £27 doesn’t recognise some issues they have had. But for all customers, particularly our vulnerable customers, from the very early stages, we do not have a limit of what we have to do to cope with their personal circumstances. We focus early on all our vulnerable customers to make sure they have transportation, accommodation, and look at any other welfare needs; they need to be focused on. That is where we focus our financial resources and we do not have a limit on that. We do what is right and proper for those people to be taken care of, from the very beginning of a storm. That is where we focus our financial resources. Secondly, we recognise that, as the storm goes on, other customers become vulnerable. Therefore, ahead of the 48 hour limit, we will start to contact customers if we believe they are going to be off for that period, and do the exact same with them. We focus on that. We think most customers hold that in much higher regard than the £27 compensation. That is what we have done in the last few years as a result of major storms. People believe that is where we should be focusing our efforts and financial resources during a storm.

Ian Lavery

There are a number of thresholds. Customers do not receive any compensation unless they experience a power cut for at least 24 or 48 hours in severe weather, or 18 hours in normal weather. Do you think that the hourly threshold should be reduced to, say, 12 or even six or below that?

Frank Mitchell

We recognise that 48 hours is a long time. One of the proposals we made for future price reviews is to move that to 36 hours, which is still a substantial time. The reason we say that is that it is the nature of storms in the north-west UK that they can last 18 to 24 hours, so we can often be unable to actually carry out repair work. That is why we focus on minimising those who are off to start with. With winds of 110 miles an hour, it is very difficult to build a network that will resist any impact. We want to move that 48 hours to a 36-hour limit for starting any compensation going forward.

Ian Lavery

You believe it should be reduced from 48 to 36?

Frank Mitchell

That is what we have suggested for the price review.

Ian Lavery

Do you think that £27 is adequate compensation for 36 hours without electricity?

Frank Mitchell

The compensation level is being addressed by the regulator, looking to move that up—I recognise that—but equally, as I have already said, we focus on our most vulnerable customers from the very earliest. We do not wait for 36 hours. We start from the very early hours of a storm, and focus on those customers who are most vulnerable and we do everything we can—and there is no limit on any budget—to help those customers in those situations.

Ian Lavery

Do you have a record of vulnerable customers?

Frank Mitchell

We have 345,000 customers on our priority services register that we have registered as vulnerable. That is what we do for customers who opt in, or we work with local agencies to identify those customers.

Ian Lavery

Is it the general feeling, as Mr Mitchell has just said, that 36 hours might be something that should be considered? May I suggest it is six hours?

Steve Johnson

From 2015 for the industry, in the normal course of events, the time will be coming down to 12 hours. That is appropriate, given the importance of electricity for everybody. As I say, certainly, from Electricity North West’s point of view, we thought it was right this time, and in the last storm event, to not put the exemption in place, because of the disruption that it brings to people.

Ian Lavery

You can see it is a real gripe of mine, the fact that the minimum compensation is £27 in this day and age for such major disruption. It is not just because it was Christmas Day, but that makes it even worse. I am sure you all agree with that. Is there a case for increasing the minimum compensation levels for families who suffer this disruption?

Basil Scarsella

Again, we doubled the compensation payment. Aside from the £75, we doubled it for St Jude and we doubled it again for the Christmas storms.

Mark Mathieson

As Steve mentioned, one thing that Ofgem are doing for the next price control review that kicks off in 2015 is changing the hours and the compensation, and it is out to consultation on that. For this period, and given the impact it did have on our customers, the fact that it is so important to spend time with friends and family, we doubled the compensation and guaranteed £75 on Christmas Day. We have just had a survey completed of 800 customers by a survey firm, which asked what the general feedback was on the appropriateness of that payment, and 64% of respondents thought that was a fair reflection. Only 14% thought it should be higher. What we have also done, in terms of our consultation on the storm with customers and stakeholders, is asked the compensation question: what is the fair level of compensation? What we will be doing is pulling all that feedback together and then considering it for our business plan that we have to submit.

Robert Symons

From a stakeholder point of view, when we talked to them about our business plan, stakeholders felt that the compensation levels were too low. What we have done is volunteer to double those payments, whether it be in good weather or in bad weather. That is where we are.

Ian Lavery

So there is a clear feeling from everybody on the panel that the minimum compensation of £27 under the Electricity Standards of Performance Regulations 2010 is set too low?

Robert Symons

We have taken independent action that says that we have doubled it.

Ian Lavery

Is that right, what I am saying?

Mark Mathieson

We have doubled it in this case, and we have consulted as to what customers think that should be.

Ian Lavery

The final point I would like to raise is with regard to people who did not have the full 24-hour period disrupted. There are a number of people who have written to the Committee who have said that they had power for a mere five minutes during the 24-hour period. This individual suggested that “We lost power in the St Jude storm from about 8.00 am on Monday. Didn’t have a sustained power return until about 9.00 pm on Tuesday evening. However, the power did come back on for about five minutes on the night of Monday”, and because of that, they will not have any claim for compensation. It was mentioned before that it automatically resets, and households come on for four or five minutes and then it goes off again. Is there a way and means by which your companies could do that to avoid paying major compensation? The main question is: if people had a five-minute break in a two-day period, will you be paying them compensation?

Basil Scarsella

We certainly do not plan to put the power back on so that we avoid compensation—far from it. We generally use a pragmatic approach. In the example you have given, I would say that we would have paid the compensation. If it was St Jude, it is likely to be one of our customers and we will be happy to pay it.

Chair

It is indeed one of your customers, because it is a customer from Suffolk. A number of my constituents unfortunately experienced loss of power in the St Jude storm. Are you able to say that if they did only have power for a five-minute period in the middle of a 36-hour outage, you will now pay them the full compensation?

Basil Scarsella

Yes.

Chair

Thank you.

John Robertson

Going back to vulnerable customers, I do not believe your companies know who your vulnerable customers are, because you do not do enough to find out who they are. I am going to talk to some of the companies at a later date on that very subject. I was intrigued by what Mr Mitchell said, not because he is my supplier but because the idea of looking after the vulnerable and poorest first, and then taking upward steps, strikes me as being quite sensible. Do you not think you should do something like that, as well?

Basil Scarsella

We do something very similar. We proactively contact the vulnerable customers. We offered hotel accommodation, and some 800 have taken it up. We paid for some 2,600 dinners. So we are doing everything we can, rightly so, for the vulnerable customers.

Mark Mathieson

I have a team every day that is working on keeping that vulnerable customer list up to date and encouraging customers to get on the list. We put leaflets around doctors’ surgeries. We try to get awareness out there: “If you feel you’re vulnerable, get in contact with us and we will contact you in a storm.” We will do the things the other guys have talked about. Equally, we are working with the agencies. If somebody is on kidney dialysis or if somebody needs oxygen tanks filling, we are talking to other agencies as to what is the best solution for that customer. That is one of the things we did during the storm. We do a lot in terms of vulnerable customers. The suppliers share their list of vulnerable customers with us in their patch. We take that list and we build on it. I think we do do a lot, John.

John Robertson

I am meeting with SSE and Scottish Power on this, but could Electricity North West, Western Power and UK Power write to me and let me know what you are doing? Mr Smith, what do you think on this? Do you think when we have Ofgem in next we should suggest to them a refocusing on these payments?

David Smith

On the Priority Service Review, Ofgem have an ongoing review right at the moment on that.

John Robertson

They take so long with their reviews. Do you think we should suggest something to them?

David Smith

I believe it is nearly completed. It started in July last year, and it would be useful to find out. We certainly fed into it; all the companies have fed into it. As Mark says, there is a very good relationship between the suppliers and the networks on that, on a range of specific issues, particularly storms and things. I think that particular one is a lot further forward than it was at least a year ago.

Graham Stringer

Obviously, the conditions were dangerous during the storm period. Were any operatives injured?

Several

None at all. Not in our case, no.

Graham Stringer

None at all. That is interesting. You have also described part of the meeting you had on 8 January with Ed Davey, the Secretary of State. I must admit, I was confused after the discussion about the 999-style number to dial. What was the tenor of that meeting? Can you tell us a bit more about that meeting?

Mark Mathieson

Certainly. Mr Davey was very supportive of the efforts of the companies. He made that quite clear at the beginning of the meeting. He wanted to talk about lessons learned. He shared the terms of reference for the DECC review. There are two reviews ongoing as we speak. There is the Ofgem review and the DECC review and, as organisations, we are feeding into both those reviews.

Graham Stringer

We have heard a lot during the discussion so far about lessons learned and improvements that have been made and will be made. We have had three sets of storms at the end of last year and the beginning of this year. Can you tell the Committee what metrics there are that can show you improved over those three storm episodes?

Basil Scarsella

First, it is the customers who were taken out and then the restoration time. You have to take into account the difference in the storm events.

Graham Stringer

I realise it is not a simple question, but I would have thought you would have attempted to measure it, so you could convince this Committee and the public in general that you were improving in a measurable way.

Mark Mathieson

There are metrics that we can show: the number of calls we made to customers, the contact with customers—all those things are there. One thing that you did allude to yourself is that each incident is so different. An incident is really defined by peak wind speed and the amount of time that wind is there for. This one was different; it took eight hours to go through the patch. St Jude was something different. Have you got lightning? When the rains are coming, lightning can be quite damaging to our networks as well. They are all different. The one thing that we would point to is you take, over a period, how the networks are performing and that gives you a good indication. You look at the number of outages that we have and the duration of those outages. Certainly, from my two networks, they have improved substantially, and that is something we have put forward that we will continue with our business plan into ED1.

Graham Stringer

If I can ask a similar question in a different way, how would this Committee know, or anybody else know, which of the companies before us is performing better than the others?

Basil Scarsella

The statistics, in terms of performance of the network, get published regularly.

Graham Stringer

In the particular situations that I am concerned about, which of the companies dealt better with the storm than the others? Does one of you want to claim to be the best-performing company, and can you show it?

Mark Mathieson

One of the things that we would discuss is the way the weather impacts. Even over the UK, it had quite significantly different impacts from that sort of wind speed. I saw within my patch a big split between north and south, a big difference there. There was a big difference between the west and east of the patch. Our internal view is that we performed very well. I am very proud of what the staff did. How do you judge that, compared with what has gone through somebody else’s patch? What was the ground saturation like? What were the wind speeds like? Where was that wind? I think it is very hard to do that comparison.

Robert Symons

One thing that may be useful is that both DECC and Ofgem are doing a report. Presumably that will highlight which companies did better and which companies did less well.

Frank Mitchell

If this is helpful, Mr Stringer, in the past, because of the geography we service, we have been in front of the Scottish Select Committee giving evidence of the long-term improvement through the work we have been doing on investment in response to storms. I am happy to have that updated, and provide that to the Committee. It is a helpful document to see how we have measured that performance from 1998, and all the investment and the impact it has had in response to storms, right through to the current date. If that is a helpful document, I am happy to provide that.

Graham Stringer

That would be useful. How do you share best practice? How do you learn from each other, and are you making increasing efforts to do that?

Steve Johnson

We do share examples quite regularly, and it is quite often through the ENA. You are probably aware that all companies are doing an awful lot of work and putting a lot of investment into innovation, to improve reliability of supply and drive through efficiencies. We spend a great deal of time sharing experiences and information and learning from projects, to make sure that all the companies share in the benefits, not just the one carrying out the project. It is something that we focus on and we make sure happens very regularly.

Graham Stringer

You have said in answer to a previous question that you will be consulting customers about their experiences, and how they can improve, when you report back to Ed Davey. Can you explain how you are going to do that?

Mark Mathieson

SSE launched a consultation and we have asked quite specific questions. We have given customers a bit of background, all stakeholders a bit of background, to the event and asked them questions, and we are encouraging as many people as possible to fill it in. I mentioned the survey of 800 specific customers; again, that will go into this. We are out asking our staff what they felt went well, what they feel we could improve, and we will pull all of that together. We will publish that in a report, together with what we are going to do differently going forward.

Basil Scarsella

We are doing something similar. We are extending it to local authorities, the British Red Cross—one of our partners that will be able to give us more information on the ground—and local councils.

Sir Robert Smith

What motivates you to do a job of making sure there are no interruptions to supply?

Basil Scarsella

Exactly that. The ideal would be to have absolutely no power outages at all.

Sir Robert Smith

But what is the business motivation for doing that?

Basil Scarsella

There are incentives. We are all competitive out there, so we all want to be the best. That is what motivates me.

Steve Johnson

There are incentives and penalties around the key reliability measures, and the point has been made a couple of times this morning. It is worth looking at the long term trend, because there has been a huge improvement in reliability over recent years. Electricity North West has plans in place to improve it yet further. Over the next five years we are looking at a 20% improvement. So looking at that long term will be very useful.

Chair

Are there any other points, in addition to those you have made in your answers, that you want to draw to the attention of the Committee? We are coming to the end of the session. I do not want you to repeat anything, but are there any additional points that we have not asked about? If there are none, I have to say I heard nothing at all this morning that reassures me that you are taking this problem seriously enough to deal with the concerns of millions of your customers, including my constituents. There is no sense of urgency in what you said about any plan to step up your capacity to respond to severe weather, even though we have now quite clear warnings that extreme events are likely to take place more frequently in future. You have managed to make the Secretary of State look ridiculous in his claim that there is going to be a three-digit number that customers can use. You have failed to demonstrate, in my view, adequate concern for the plight of your customers. That is characteristic of monopolies whose activities are not very effectively scrutinised by anybody, until now. Frankly, if your customers had the capacity or the freedom to switch to an alternative distributor, I am sure that millions of them would be doing so as we speak. I have to conclude that you are exploiting your privileged monopoly position, and you have displayed a neglect of your customers that I personally find absolutely astonishing, but thank you all for coming in. Examination of Witnesses

Witnesses

Andrew Wright, Interim Chief Executive, and Hannah Nixon, Senior Partner for Distribution, Ofgem, gave evidence.

Chair

Thank you for your patience. I am sorry you had to wait, but there was a lot of interest in our previous panel. I am grateful to you for coming in. I am sorry, but we are going to overrun a bit. I think we have let your colleagues know, in case you need to make arrangements to stay a little longer. You heard the latter part of that evidence, and I am sure you have thought about this quite carefully. What is your assessment of the adequacy of the response of the DNOs to the Christmas storms?

Andrew Wright

These were severe storms. There was a lot of damage done to the networks. Many thousands of customers lost supply. I was one of those customers. I was off supply for 20 hours on Christmas Eve and many of my immediate neighbours were off for much longer.

Chair

It is reassuring to know that Ofgem do not get privileged treatment.

Andrew Wright

Absolutely not. We understand the hardship caused to customers as a result of this, particularly because it happened over the Christmas period. We are undertaking a review of what happened. We have already asked for and received information from the DNOs, the distribution companies. We are looking through that at the moment, and we intend to get to the bottom of what happened, why some areas were impacted more than others, and why the restoration times were longer in some areas than others, and trying to understand whether this was a consequence of the different weather impacts, or whether it was a consequence of the different responses of the companies. That is what we are going to try to get to the bottom of.

Chair

When will you get the results of that?

Andrew Wright

Our initial report on this is going to be roughly on the same time scale as the Government review, so we are looking at early March. We will be feeding some of the information we are collecting into the Government review as well.

Chair

Were you surprised at how long it took the companies to reconnect some customers?

Andrew Wright

First of all, I was surprised at the level of damage. We are an evidence-based regulator and we can only fully understand the restoration times when we understand the level of damage and we understand the responses of the companies and whether or not those responses were adequate. When we have seen similar storms in the past—if you go back to 2002, for example—the restoration times have been longer, so these are not untypical for storms of this type, but I do not want to draw conclusions here. We are going to look at the scale of the problem, the level of response of the companies, and whether or not that was adequate, and we can draw our conclusions when we have all that full information.

Chair

Doesn’t that answer rather highlight the essence of the problem here? In some of the answers earlier, they were saying, “We have had these problems before. We are doing slightly better than in 2002”. In any competitive business, you have to do vastly better. If you produced a car that was of 2002 standards in 2014, it would not sell, but the customers here have no alternative. They are forced to go to these people. They do not know who they are. They do not realise that 15% of their bill, in some cases, goes to these DNOs. So your role as regulator assumes a vastly greater importance, because there is no other public scrutiny.

Andrew Wright

We absolutely accept that, and we recognise that these are monopoly businesses. That is why we control their charges directly, and we provide the incentive framework that aims to encourage improvements in their performance. We have an incentive-based regulation, which means that it is in the companies’ interests to do the best things for consumers. I have said to you, in the context of the competitive parts of the industry, that one of the reasons why we favour competition is that this is not easy. Outputs that customers require have many aspects to them—different circumstances, different response times—and getting that absolutely right is difficult, but I think overall we have done an extremely good job. Since privatisation, we have seen reliability of the networks improve by a third. We have seen improvements in the response times during storms. We have seen significant reductions in costs delivered during that period, and driving down costs is as important as improving reliability in outputs. We think the regulatory framework that we have has delivered for consumers. That is not to say there are not improvements, and at every price control we make incremental improvements to it.

Chair

Given your uniquely advantageous viewpoint, which is the best-performing DNO and which is the worst-performing DNO?

Hannah Nixon

It is clear from the data we have from the DNOs that two of the distribution companies in the south, UKPN Southern Network and SSE Southern Network, were most affected by the storms. They had by far the largest number of outages. The question for us now is why that happened. Is it just a function of the severity of the weather in those areas or is it because those DNOs were doing something different in terms of preparedness or response from the other DNOs? That is exactly what we are looking into in a lot of detail at the moment. There is clearly no room for complacency here. We are always concerned when customers are off power, particularly for extended periods, over severe weather periods—over Christmas—and we want to make sure that the DNOs did absolutely all they could to get those customers back on to the system as soon as possible.

Chair

That is all very interesting, but it does not answer the question. You have been regulating these companies for many years now. Which is the best-performing DNO and which is the worst-performing DNO?

Hannah Nixon

The storms—

Chair

Not in the storms. Let us take the last five years.

Hannah Nixon

Generally, all of the DNOs have improved. We do have data.

Chair

Which is the best, if they have all improved? Tell us which is the best.

Hannah Nixon

At the moment, the best-performing DNO is Western Power Distribution.

Chair

The criteria by which that is judged are what?

Hannah Nixon

That is in terms of the number of minutes lost to consumers and the number of outages, and in terms of broader submissions on customer service as well.

Chair

Okay. Is that collected on an annual basis?