What can you do to recover the cost of a power cut?

Power cuts can be caused by damage to the network, fallen trees and severe weather – it can’t always be helped, but in the meantime businesses can lose out. What do you do next?

We are fast approaching the winter months, and despite the UK’s reliable energy network, a severe enough storm can lead to power cuts.

Only a few weeks ago, storm Aileen knocked out the power at 50,000 homes across the Midlands and South Wales. The storm reached wind speeds of 83mph at its peak across the Needles in the Isle of Wight.

It is hard to predict what the coming months will bring, but while any power outages can make day-to-day tasks such as charging a phone or cooking a meal tricky for households, it can be severely damaging to small businesses.

A small business going without power may be missing out on orders and man hours, while still having to pay staff and rent and other costs. It can soon add up, and take its toll on your bottom line.

Unfortunately, there isn’t much business owners can do in the way of preparation for power cuts. The best way to prepare is to know your rights to compensation if your business is hit with a power cut.

How does it work?

The energy network in the UK is made up of the electricity and gas distribution companies that own and operate poles and cables to transfer energy from where it is generated to the homes and businesses that use it. These companies do not sell the electricity, they transport it – the energy is sold by suppliers.

These distribution companies are required to meet the Quality of Service Guaranteed Standards and if these standards are not met, customers may be due a payout.

The amount paid out will depend on circumstances, and you can review this guide from Ofgem to gain an understanding of what you might be due.

Customers are not able to choose their distribution companies, but if you are interested to know yours it should be on your electricity bill. Alternatively, you can look it up on the Electricity Distribution Map on the Energy Networks Association’s website.

Claiming compensation

If there is a power cut, you can call 105 to be put through to your local electricity network operator – regardless of who you buy your electricity from – in order to report it.

A business may be due some compensation following a power cut depending on the length of time it lost power for and the reason power was lost – but the power network companies are not liable for loss of profits or damage to a business. They may however be able to confirm details of a power outage to help a business make a claim on its insurance.

Ofgem will monitor how well power cuts are dealt with, and will step in if it finds that networks companies are in breach of obligations.

If you do decide that you want to make a claim, you will need to contact your local distribution company within three months of power being restored.

If this is not resolved satisfactorily, you can follow the Energy Ombudsman complaints procedure.

For more information on whether or not you are entitled to make a claim, take a look at the Knowing Your Rights: power cuts guide.

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