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Ofgem publishes outcomes of review of Severe Weather Compensation Arrangements

Ofgem has published the outcomes of its review of the Guaranteed Standards of Performance for Severe Weather, the review it committed to as Action 19 of the Storm Arwen Report.

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Ofgem published a report on 28 November 2022 setting out the outcomes of its review of the Guaranteed Standards of Performance (GSoP) for Severe Weather for electricity customers1. The review was committed to as Action 19 of the Storm Arwen Report, which the regulator published in June1.

The commitment, in Ofgem's own words, was to:

"commission a review of the GSoP for Severe Weather to identify amendments that will better acknowledge the impact of extended power cuts on customers"
Ofgem, Review of Severe Weather Compensation Arrangements for Electricity Customers1

The report states: "This report sets out the outcomes of this review."1 It is listed under the topic of electricity distribution and is classed as a policy publication1. Alongside the report, Ofgem published an open letter on the review of the Severe Weather Compensation Arrangements for Electricity Customers1.

The Storm Arwen Report was published in June, and Action 19 was one of the commitments made in it1. The review concerns the GSoP for Severe Weather, the standards that govern compensation for customers affected by extended power cuts1.

The published material does not set out the specific amendments proposed to the standards, the compensation rates, or the number of customers affected. Those details are not reported1.

Why it matters for households

The GSoP for Severe Weather sets the terms on which households can receive compensation when a storm or other severe weather leaves them without power for an extended period. The review's stated purpose is to identify amendments that better acknowledge the impact of extended power cuts on customers1, which places the level and the trigger for that compensation in scope.

For a household, the practical question is what happens when the network fails and the home's supply is lost. Compensation arrangements sit alongside, not in place of, a home's own resilience. A household that depends entirely on a grid connection has no supply when the network goes down; the standards determine what it can claim afterwards, not whether the lights stay on. The review therefore bears on the financial recovery available after an outage, rather than on the ability to keep power during one.

The regulator's role in setting and enforcing these standards is set out in our guide to Ofgem and what the energy regulator does, and this sits within the wider regulation and policy area.

What happens next

No dated next steps are given. The report sets out the outcomes of the review, and an open letter accompanies it1. Any further consultation, decision or implementation date has not been reported1.

Sources1 cited
  1. Review of Severe Weather Compensation Arrangements for Electricity Customers | Ofgem, ofgem.gov.uk