Utility Week

20 | 22ND - 28TH FEBRUARY 2019 | UTILITY WEEK Finance & Investment Event CFO roundtable, Covent Garden Hotel, 24 January 2019 O ne thing keeping utility chief financial officers up at night is trying to jug- gle the multitude of challenges being thrown at them. That was the verdict of the senior financial executives who were invited by Utility Week and Oracle to meet in London at the end of last month to discuss the lot of the chief financial officer. "The pressure on us is coming from dif- ferent angles," said one roundtable attendee. Climate change, and the consequential change in weather patterns, is altering the way both energy and water companies are operating. At the same time, they're grappling with issues such as huge regu- latory change, increasing customer expec- tations and negative public perception. And then there's Brexit – which is making everyone nervous. Ticking the boxes of the risk register Brexit has certainly proved a distraction. But it hasn't featured in any big way for regulated utility companies up to this point. Although it is an issue that is "moving up the risk reg- This increased focus on "the customer" at PR19 means the importance of branding has risen up the agenda. ister" for companies of all stripes as the leave date approaches. Regulatory change is a much bigger factor in companies' current decision-making. For water companies, PR19 has become increasingly demanding, and things look set to follow the same path for the energy net- works as the road to RIIO2 begins. "It's all about PR19 at the moment," said one repre- sentative from the water sector. "Even with things like customer service." This increased focus on "the customer" at PR19 means the importance of branding has risen up the agenda. Previously, companies didn't want cus- tomers to know they existed. Now, as the issue of social responsibility is becoming increasingly important, they're finding they must build a brand people trust and prove the legitimacy they have as service organi- sations. In this area, it was agreed, utilities still need to do a lot more to shout about how they contribute to society. And not only that, they need others to talk about what they're doing that's good as well. This is a big ask for "old, archaic" util- ity companies. But if they get it right, they should be able to counter the negative per- ception that has surrounded them recently, which has led to threats of renationalisation. Where does this public outcry come from? There was a general feeling in the room that it was fed by issues around executive pay and company finances. This is an area where utility companies need to stay calm and be transparent about what they're doing. For example, some water companies are in the process of winding down their Cayman Island subsidiaries to appease the public. Another bugbear for roundtable par- ticipants was the negative effect that regu- latory changes would probably have on investor confidence. Representatives from energy network companies were particularly Rising to the challenge Is Brexit really that bad for business? Are investors still interested in UK utilities? These were two of the pressing questions up for debate at Utility Week's CFO roundtable, in association with Oracle, in London. Lois Vallely was there.

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