ENERGY companies that leave customers without power for more than 24 hours because of the effects of storms or bad weather are to face stiffer financial penalties after the regulator Ofgem announced it is more than doubling the fines it can impose.

The energy watchdog confirmed the minimum payout for consumers left without power for long periods during a severe weather event will rise from £27 to £70, while the cap for payouts will increase from £216 to £700.

After the initial payment, the firms will have to pay another £70 for each 12-hour period a customer goes without power.

The higher payouts will start from next April.

The move is in response to stormy conditions such as those that caused widespread blackouts on Arran in March last year and the festive season floods in southern England.

Ofgem warned the industry it must learn the lessons of last winter and said automatic payments should be made to customers where possible.

It hoped increasing the charges would strengthen the incentives for companies to act quickly and reconnect homes and businesses as soon as possible.

The announcement came as energy companies SSE and UK Power Networks (UKPN) were ordered to pay an additional £3.3 million after an investigation into how they handled last winter's storms.

The firms have already paid out £4.7m and committed to improvements following the severe weather last year, bringing the total to £8m.

It said it found that while SSE and UKPN's southern arms were badly hit by the heavy rainfall "they could have done more to get customers reconnected faster and to keep them better updated on what was happening".

Severe weather last Christmas saw power cuts affect nearly a million homes and widespread flooding of large areas in England.

Ofgem said SSE and UKPN's power networks bore the brunt of it, with each facing nearly 1,100 incidents, affecting 250,000 customers on the networks.

Between them they restored power to more than 95 per cent of customers within 48 hours, but almost 16,000 customers remained affected for more than 48 hours.

Ofgem said: "The companies have recognised they must improve their procedures for any future major interruption and Ofgem has today put the industry on notice that any repeat of last year's performance issues will trigger further action."

The firms have so far paid £4.7m to consumers under current "guaranteed standards" and in goodwill payments. But the regulator said that in the light of its findings they had agreed to make donations totalling £3.3m to organisations, such as the Red Cross, that play a key role helping vulnerable customers during severe weather.

Maxine Frerk, Ofgem's senior partner for distribution, said: "While we recognise the hard work of the companies and their staff who were out working to reconnect customers during the severe weather, the companies could have done more to plan for the weather and keep customers informed. This is why we have secured an additional £3.3m, bringing the total payout to £8m."

SSE's payout totals £4.6m, including £2.3m in guaranteed standards and goodwill payments and £2.3m to the British Red Cross, Age UK, National Energy Action, Macmillan Cancer Support, and to a new community fund.

UKPN's payout totals £3.4m, including £2.4m in guaranteed standards and goodwill payments and £1m to the British Red Cross, the Royal Association For Deaf People, Carers Trust and Citizens Advice.

The announcement comes as the Competition and Markets Authority sets out details of a major investigation it is opening into the UK energy market.

Ofgem referred the industry to the Authority after saying soaring household bills and intensifying public distrust highlighted the need for an investigation.

It is due to report by December 25 next year.