Utility Week

UTILITY WEEK | 1ST - 7TH MARCH 2019 | 13 Policy & Regulation This week Firms engaging with water licence change Majority of companies have now agreed to be held by the ambitious standards of governance Ofwat is close to finalising the wording of the new licence condition for water companies to meet principles concerning board leadership, transparency and governance. Jonson Cox, chair of the water regulator, said Ofwat is "impressed" by the level of company engagement with the principles so far following the publication last month. In a letter sent on 22 February to the chairs of the largest licensed water companies and infrastructure providers in England and Wales, Cox said: "A majority of companies have now agreed to be held by the ambitious standards of governance as set out in the principles." The revamped principles put a "strong focus on pur- pose, values and culture", according to the regulator. Cox highlighted that seven companies – Anglian Water, Bristol Water, SES Water, South East Water, South Staffs Water, Southern Water and Wessex Water – have already indicated they will endorse the principles by accepting a licence condition to meet the objectives. These join five – Severn Trent, Hafren Dyfrdwy, Thames Water, Portsmouth Water and South West Water – who already have a licence condition to meet the principles. The new principles will come into effect from 1 April 2019. Ofwat is proposing to consult further on amending firms' licences to make the objectives mandatory. Cox said: "We will soon be writing to all companies seeking agreement to the text of the licence condition. We will aim to publish a formal consultation under the Water Industry Act 1991 on this licence condition in spring 2019." KP ENERGY Smart meter issues being 'sugar coated' The government has been accused of "sugar coating" problems around the smart meter rollout and being too pas- sive about tackling an emerging north/south divide in the rate of SMETS2 installations. Rachel Reeves, chair of the Business, Energy and Industrial Strategy (BEIS) Committee, has criticised the government's approach to the management of the programme following the publication of her correspond- ence with energy and climate change minister Claire Perry. The exchange of letters fol- lows a hearing of the committee on 9 January into the findings of the National Audit Office's pro- gress report on the smart meter programme. Reeves said: "From our evidence hearing and the sub- sequent ministerial correspond- ence, the government's tendency is to sugar-coat and pretend that everything will turn out alright in the end." She pledged that the BEIS Committee will continue to monitor the costs, timescales, and operability of the rollout. GAS No new connections from 2025, says CCC No new homes should be con- nected to the gas grid from 2025 at the latest, the government's climate change watchdog has recommended as part of a wide- ranging package of measures to cut emissions from the UK's housing stock. A new report by the Commit- tee on Climate Change (CCC), published on 21 February, urges the government to dramatically improve energy efficiency stand- ards for both new and existing housing in order to help meet the UK's statutory targets to cut emis- sions to 80 per cent of 1990 levels by 2050. It warns this target will not be met unless there is a near elimination of emissions from the UK's 29 million buildings. ENERGY Summer publication for white paper The government's energy white paper will be published in the "early summer", a minister has revealed. Pressed on the timing of the long-awaited policy paper last week during a debate on small modular reactors in the House of Commons, junior business min- ister Richard Harrington said: "That will happen in the next few months – in early summer. "Our intention is that nuclear, and the small modular reactors side of it, will be developed in the white paper," he said, add- ing that SMRs are at the "core" of the government's strategy for developing nuclear power. Cox: 'impressed' by companies' engagement Political Agenda David Blackman "The CCC recommendation has had a ferocious response" Slightly more seasoned Utility Week readers will remember the BBC comedy Yes Minister, which centred on politician Jim Hacker and his chief civil servant Sir Humphrey Appleby. "Very brave, minister" was the typical reaction of the cyni- cal mandarin when presented with his political master's more off-the-wall proposals. Among the current Sir Hum- phreys at the Department for Business, Energy and Industrial Strategy, there will be probably while Calor accused the commit- tee of stepping beyond its advi- sory remit into shaping policy. But the furore unleashed by last week's housing report is likely to be a harbinger of bigger clashes. In early May, the CCC will be publishing its advice to ministers on how the UK can cut emissions to net zero. The CCC's job is to deliver unpalatable truths about how to deliver the UK's greenhouse gas reduction targets: it had better get used to being "brave". have been some similar eye rolling following last week's publication of a report on hous- ing by the Committee on Climate Change (CCC). Its most eyebrow-raising recommendation was that new-build homes should not be connected to the gas grid from 2025. The report argues that this radical move is required to help cut emissions from the housing stock, currently around one- seventh of the UK total, to zero. The one-line recommenda- tion has generated a ferocious response from the gas industry and its unions. The GMB union has called on ministers to ignore the CCC's recommendation,

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