A gas distribution company which has its main operation in Leicestershire has agreed to pay tens of millions of pounds to improve its service after letting down thousands of customers.
Cadent, which has major operations in Hinckley, Leicester, and in nearby Coventry, is paying £24 million following the failures.
It is also setting up a £20 million community fund to help vulnerable customers.
Ofgem said the business, which runs pipelines between the national gas network and 11 million homes and businesses, left thousands of residents in blocks of flats without gas for an unacceptable amount of time.
It said Cadent also failed to pay compensation over a six-year period to as many as 12,000 residents who were without gas for more than 24 hours.
On top of that, the business was found to have no records of 775 high rise blocks of flats in its London network – which meant they were not part of its regular inspection or maintenance programme.
The announcement comes just days after Cadent launched a major cost-cutting drive in which half of its 4,000 staff have been invited to take voluntary redundancy.
It is thought 400 jobs could go.
Cadent is also cutting the number of contractors it uses and asking employees to consider more flexible retirement plans.
There are around 1,000 staff, including contractors, at a main office and call centre in Brick Kiln Lane, Hinckley, and 300 staff in Coventry.
There is a call centre in Leicester and Cadent also runs the national gas emergency service, which has a depot in Aylestone Road, Leicester, and which is not affected by the job cuts.
Following the Ofgem investigation, Cadent will double the statutory compensation payments – at an estimated cost of £6.7 million – made to customers suffering an unplanned interruption of their gas supply for more than 24 hours. That will run for the next two years.
It said the business is now committed to improving the way it maintains services to flats and will spend around £4.8 million on a dedicated team to improve performance in apartment blocks.
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It will pay £8.9 million to Ofgem’s consumer redress fund administered by the Energy Savings Trust and a further £300,000 to residents who faced delayed compensation payments in 2018-2019.
It will also cover the £3.6 million costs associated with the investigation and putting right the issues highlighted.
Ofgem chief executive Dermot Nolan said: “Cadent has a duty of care and responsibility to millions of people across half of the country who rely on the gas it pipes to their homes for cooking and heating.
“Cadent acknowledges that it failed these customers by leaving many without gas for longer than necessary, failing to properly compensate some of those affected and not having the proper systems in place to keep records of all the high rise blocks of flats it supplies.
“Ofgem has worked with the company, which is under new ownership and has given commitment to improve its operations to put customers at the heart of the business, to help it address its failings and prevent further harm to customers’ interests.
“Cadent has also agreed to make a significant financial contribution to customers as redress in recognition of its past failings. This is a move we welcome.”
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Formally part of the National Grid and before that Transco, Cadent takes a share of the bills that customers pay their suppliers.
The business made an operating profit of £724 million on revenues of £1.85 billion in the year to March 31, 2018.
During its last financial year Cadent had debts of around £6 billion but said it had enough “headroom” to meet “all financial operations and to fund operations, even during periods of market disruption”.
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