Are Power Cuts Costing Your Business Money?

There are 14 licensed distribution network operators (DNOs) in Britain and each is responsible for a regional distribution services area and therefore, fixing a power cut if you have one. The 14 DNOs are owned by six different groups.

The DNO groups and individual DNOs are:

Electricity North West Limited 
Northern PowergridNorthern Powergrid (Northeast) Limited
Northern Powergrid (Yorkshire) plc
Scottish and Southern EnergyScottish Hydro Electric Power Distribution plc
Southern Electric Power Distribution plc
ScottishPower Energy NetworksSP Distribution Ltd
SP Manweb plc
UK Power NetworksLondon Power Networks plc
South Eastern Power Networks plc
Eastern Power Networks plc
Western Power DistributionWestern Power Distribution (East Midlands) plc
Western Power Distribution (West Midlands) plc
Western Power Distribution (South West) plc
Western Power Distribution (South Wales) plc

You don’t pay electricity bills to Distribution Network Operators; they just own and operates the power lines that connect homes in the UK to their networks.

DNO’s are responsible for making sure there are as few power cuts to business owners and homeowners as possible. Each year UK Power Networks alone spend about £500 million to maintain and replace electricity cables and power lines – they are responsible for East and South East of the UK and power lines across London. It doesn’t matter how much is spent however, as sometimes power cuts do happen, and your business needs to be prepared for that.

Plans for your business in case of a power cut

There are steps that you can take to prevent loss to your business during a power cut:

  • Many businesses have their own backup generators to use during a power cut. This means that if your business has a power cut the generator will kick in and will keep your business running smoothly.
  • A good one to start looking into is the 100KVA generator. Some generators will be larger than this, but it is the recommended average.
  • For a smaller business, purchase an Uninterruptable Power Supply device (UPS) This is a small device that lets you work through short power cuts and will shut down your computer or equipment safety. You can buy them from electronic retailers. Prices vary from £40 upwards.

What to do if your business has lost money

Having a power cut is frustrating and having no power at your business can mean having to close for the day, losing important information, communications and income. Your business insurance may cover you, though, so the first thing to do is to check your policy. However, your power distributer is not liable for any loss or damage to your business.

‘Terms of connection’

Wherever you live in the UK to receive a supply of electricity you require both:

  • The electricity you receive from your electricity supplier will be delivered using the distribution network run by your local network operator.
  • Your supplier has been appointed as the agent of your network operator to obtain a connection agreement with you on these terms, which are the same across the UK. When you enter into an electricity supply contract you are also entering into this connection agreement with your local network operator.
  • Connection to a network

The premises will remain connected to your network in accordance with the provisions of the Electricity Act 1989, any other legal requirements that apply from time to time, and the terms of this agreement.

  • Network constraints

The obligation of your DNO under this agreement are subject to the maximum capacity and any other design feature of the connection. You must contact us in advance if you propose to make any significant change to the connection or to the electric lines or electrical equipment at the premises, or if you propose to do anything else that could affect your network or if you require alterations to the connection.

  • Generating Equipment

 If you install or arrange for the installation of, small-scale generating equipment at the premises-which means one or more sources of electrical energy that an aggregate rating of no greater than 16 amps per phase connected at low voltage – that you must inform your DNO of your intention to use no later then 28 days after the equipment is commissioned. As long as you do this, you do not need your distributers consent, however, if you intend to install or operate any other kind of generating equipment at the premises you must contact us in advance to obtain consent. All generating equipment used at the premises must comply with the applicable requirements of the distribution code that applies to all licences. To obtain a copy contact your network operator.

  • Providing information

You must provide your DNO with the information they request in relation to the nature, or use by you, of electrical equipment at the premises. Your distributor will only ask for information that we need in relation to this agreement or the distribution code that applies under their licence.

  • Conveying electricity

Your DNO cannot guarantee that they will convey electricity through their network at all times, or that electricity delivered through their network will be free of brief variations in voltage or frequency.

  • Cutting off the supply

Your DNO may cut off the flow of electricity through the connection where your distributor is entitled to do so under the general law. your distributor may also cut off the flow of electricity where they are required to do so under contract with an electricity supplier or because of the electricity industry arrangements under which they operate in accordance with our licence.

  • Unauthorised use of a network

This agreement entitles the premises to be connected to your network for the purpose of receiving electricity from or exporting electricity to, your distributor’s network. Any other use of your network, including the transmission of data or communications, is strictly prohibited unless with your distributors prior written consent. Unless they have given consent any such use of their network by you or relating to the connection, shall be a breach of this agreement, and you shall be liable for the losses that incur as result whether directly or indirectly.

  • If something goes wrong If your distributor fails to comply with any term of this agreement or are negligent, you may be entitled under general law to recover compensation from us for any loss you have suffered. However, they will not be required to compensate you for (and you should consider obtaining insurance against) loss caused by anything beyond their reasonable control, any indirect loss, or any direct loss or indirect economic or financial loss (including wasted expenses or any loss of revenue, profit, or interest, any loss of business, commercial, market, or economic opportunity, or any loss of contact or goodwill) other than where you are entitled to recover compensation for the loss under the general law in relation to death or personal injury.
  • Business customers If the electricity supplied to the premises is wholly or mainly for business purposes, their liability to you in relation to that premises, and your liability to us in relation to that premises, will (subject to the limitations in clause 9) be limited to a maximum of £100,000 per calendar year.
  • Changing the connection agreement

The terms of this agreement will be changed automatically to incorporate any changes which are approved by your distributers regulator, the Gas and Electricity Markets Authority (GEMA). Notice of any changes which is approved will be advertised in the national press, and the new terms will be published on the Internet at www.connectionterms.co.uk

  • Agreeing other connection terms

You and your distributor may each, at any time, ask the other to enter into an alternative connection agreement in respect of the connection if you or they believe an alternative agreement is needed because of the nature of the connection.

  • Ending this agreement

This agreement will end when one of the following occurs:

  • you and your distributor agree on a replacement agreement in respect of the connection;
  • the flow of electricity through the connection is permanently stopped; or
  • any circumstances arise which legally entitle us to cut off the electricity flow through the connection and you will be contacted to let you know that this agreement is ended. The ending of this agreement for any reason will not affect any rights, remedies or obligations which may have come into being under agreement prior to its ending and clauses 9 and 10 will continue to apply.
  • Transferring this connection agreement

You are not entitled to transfer this agreement to another person without your distributors consent.

Your rights to compensation

For compensation, Ofgem has standards that are applicable to all DNO’s.

EGS 1 Main fuse failure (Regulation 12) If the main fuse between your distributors supply cable and your meter fails, your distributor will visit within three hours on weekdays if you call us between 7am and 7pm. On weekends and Bank Holidays, you will be visited between 9am and 5pm.

EGS 2 Supply restoration during normal weather (Regulation 5) If your electricity supply fails during normal weather conditions because of a problem with our distribution system, we will work hard to get the power back on as quickly as possible. However, if it takes us more than 12 hours from the time your distributor is made aware of the loss of supply, you will be paid £75 if you are a domestic customer and £150 if you are a business customer. You will be paid another £35 for each additional 12 hours you are without supply. The Standard requires you to make a valid claim within three months of the date the supply is restored.

EGS 2a Multiple interruptions (Regulation 10) If you have had four or more power cuts in a year, each longer than three hours, you will be paid £75. The payment is the same whether you are a domestic or a business customer. You must claim the payment within three months of the end of the year, which runs from 1 April to 31 March. When making a claim you will need to provide the address of the property affected and the dates of the electricity supply failure. (You cannot include in your claim any incident where you have already been paid or any power cut that you know about in advance).

EGS 2b Supply restoration: during normal conditions – 5,000 or more premises interrupted (Regulations 6) If we have a single failure, fault or damage on your distributor’s distribution system affecting 5,000 or more premises. However, if it takes more than 24 hours, you will be paid £75 if you are a domestic customer and £150 if you are a business customer. You will be paid another £35 for each additional 12 hours you are without supply. The Standard requires you to make a valid claim within three months of the date the supply is restored.

EGS 2c Supply restoration: rota disconnection (Regulation 8) This Standard applies when supply to the customer’s premises is interrupted as a result of a rota disconnection on your distributor’s network. If we do not restore your supply within 24 hours, we will pay domestic customers £75 and non-domestic customers £150. The Standard requires you to make a valid claim within three months of the date the supply is restored.

EGS 4 Notice of planned supply interruptions (Regulation 12) If we need to switch off your power to work on your distributor, the network we will give you at least two days notice. If we need to switch off an Independent Distribution Network Operator (IDNO), we will give at least five days notice. In both cases, the notice does not apply if work is for emergency repairs. If we don’t give you the required notice, or we switch your electricity off on a different day, then you can claim (within one month of the failure) £30 if you are a domestic customer and £60 if you are a business customer.

EGS 5 Supply voltage (Regulation 13) If you inform us that the electricity to your property is outside the permitted voltage range, we will contact you and arrange a visit to your property within seven working days, or, if a visit is not necessary, you will be given a written response within five working days. If your distributor fails on these timescales we will arrange for you to receive £30.

EGS 8 Appointments (Regulation 17) If your distributor needs to come to your property, or you ask us to visit, they will agree on a date and time with you.

EGS 9 Notification of payment under guaranteed standards (Regulation 21) you will be notified, or your supplier, of any Guaranteed Standards your distributor fails to meet (other than those for which you have to make a claim). In any case, your distributor will send your payment directly to you within 10 working days of becoming aware of the failure except in the case of

EGS 11 (Regulation 7). If your distributor fails to notify you, or your supplier, or fail to send payment within the relevant time scale, your distributor will arrange for you to receive an additional £30. EGS 11 Severe weather (Regulation 7) If your electricity supply fails because of a problem on your distributers system due to severe weather, your distributor will restore it within the period prescribed by the Electricity (Standards of Performance) Regulations 2005, dependent upon the scale of the event. Category 1 (medium events) Lightning events – when your distributor experiences at least eight times the normal amount of faults in one day – supplies will be restored within 24-hours. Non-lightning events – when your distributor experiences between eight and thirteen times the normal amount of faults in one day – supplies will be restored within 24-hours. Category 2 (large events) Non-lightning events – when your distributor experiences at least thirteen times the normal amount of faults in one day – supplies will be restored within 48-hours. Category 3 (very large events) During any severe weather events supplies will be restored within a period as calculated using a formula based on the number of customers affected, as set out in the Electricity (Standards of Performance) Regulations 2015. If your distributor fails and you make a valid claim within three months of the date the supply is restored, you will receive £70 (for both domestic and business customers). You will also receive a further £70 for each additional 12 hours you are without supply. The maximum payment you will receive totals £700. These payments will be made as soon as reasonably possible.

Can power cuts be prevented permanently?

Electricity networks are 99.99% reliable and power cuts are quite rare. However, it can’t be guaranteed that you will never have a power cut again because power cuts can happen for various reasons outside of your distributor’s control.

Planned power cuts

Sometimes the power may need to be switched off while work is being done on electricity cables nearby. For example, underground cables may need replacing or repairing. Or changes to overhead lines may be being made because one of your neighbours has requested it. For this work to be carried out safely, electricity supplies must be turned off in the area. You should be notified of this.

What causes power cuts?

You may not have thought about this before but these scenarios commonly cause power cuts. Weather:

  • Severe winds can cause damage to overhead power lines. Wind-borne debris or trees falling on power lines can pull them down.
  • Water can get into underground electricity cables and damage the cable.
  • Lightning can damage power lines and equipment
  • Trees brushing against an electricity line can damage it.
  • Other people damaging cables
  • When digging in the ground or working near overhead power lines occasionally people do damage your distributers electricity cables. For example, someone could accidentally cut through electricity cables when digging.

Next door has power – why don’t you?

Your electricity network is built in a way that means different buildings (even in the same street) can receive their power from different electricity cables. This means if there is a fault on one electricity cable, not everyone’s power goes off.

Advice during a power cut

Keeping your food cold:

  • Avoid opening the fridge or freezer door to protect the food. Food can usually last up to 15 hours if you do this.

General tips:

  • Unplug any sensitive appliances until your power comes back on.
  • Remember that many modern home phones, particularly cordless ones, may not work during a power cut.
  • Limit the use of your laptop or smartphone to retain battery power.

How your power comes back on:

  1. Once a power cut is identified, a team investigates
  2. Firstly, your DNO will see if they can fix the problem remotely which is the quickest way (it’s not always possible though)
  3. If not, then an engineer will travel to your local area.
  4. The engineer will go to one of the electrical substations to try to get the power back on as quickly and as safely as possible.
  5. Sometimes it may take longer for us to fix the fault if there is damage to equipment.
  6. You may receive regular updates on how the work is going depending on your DNO.
  7. Your power is back on!

For more information about this post and how Energy Solutions can help with your Electricity, Gas, or Water, click on the links, or check out the contact details at the bottom of the page.