Utility Week

UTILITY WEEK | 8TH - 14TH MARCH 2019 | 3 This week 4 | Seven days 6 | Campaign Can a new era of regulation help plug the utilities legitimacy gap? 10 Policy & Regulation 10 | News CMA launches probe into RWE/Eon deal 13 | Opinion Matthew Vickers, chief executive and chief ombudsman, Energy Ombudsman 14 | Analysis The state of the UK energy retail industry 17 Finance & Investment 17 | News Capacity market fees voluntary during halt 18 | Analysis What premium for ENW? 20 Operations & Assets 20 | High viz Orsted and Northumbrian Water Race Bank contract 21 | Market view The Green Belt should be greener 23 | Market view It's time to rethink the smart meter rollout 24 | Case study Why UKPN won the 2018 Environment Award 27 Customers 27 | News Households urged to take Netfl ix approach 28 | Market view Energy suppliers need to forge innovative alliances 29 | Chief executive's view Douglas Millican, Scottish Water 30 Community 31 | Disconnector GAS 6 | Campaign Can a new era of regulation help plug the utilities legitimacy gap? WATER 29 | Chief executive's view Douglas Millican, Scottish Water ELECTRICITY 17 | News Capacity market fees voluntary during halt 18 | Analysis What premium for ENW? 20 | High viz Orsted and Northumbrian Water 24 | Case study The 2018 Environment Award ENERGY 10 | News CMA launches probe into RWE/Eon deal 13 | Opinion Matthew Vickers, chief executive, Energy Ombudsman 14 | Analysis The state of the UK energy retail industry 21 | Market view The Green Belt should be greener 23 | Market view It's time to rethink the smart meter rollout 27 | News Households urged to take Netfl ix approach 28 | Market view Energy suppliers need to forge innovative alliances DOWNLOAD: How to beat the digital disruptors at their own game https://bit.ly/2MfKXA8 See the Community section, page 30 Leader Suzanne Heneghan The changing role of regulation Time was, an energy or water regulator's lot was a relatively straight- forward one. Just a couple of decades back, working to ensure cus- tomers of privatised monopolies weren't exploited or short-changed was viewed largely through an economic prism – such as whether price rises re• ected costs, or if previously nationalised industries were incentivised to operate as e• ciently as possible to attract su• cient investment for lifeline services. Tools of the trade would certainly not have included the kind of vulnerability strategy report we await from Ofgem today – which shows how far things have come in the regulatory game. The need for transparency, consistency, proportionality and accountability has always been there, but the impact of the shi• from rules-based to principles-based regulation suddenly feels starker than ever. For instance, rewind • ve years to one of the • rst acts of Ofgem's newly appointed chief executive, Dermot Nolan. Referring the energy industry to the Competition and Markets Authority (CMA) amid fears it wasn't acting in the interests of consumers, he'd called for "changes no-one had thought about". As we now know, the price cap would later emerge, something Nolan is steering through during this • nal year of his tenure. Yet what he did strongly predict was the need for an "agile regu- latory framework able to adapt to what the future may throw at us". Today's shi• in mindset across energy and water towards a more fairness-based regime feels the ultimate expression of that. In an era of growing consumer power around energy retail, water, and increasingly networks, a fairer deal for customers has become a vital, if challenging, part of any regulatory calculation. And as our Voices columnist Maxine Frerk re• ects (see p9) Ofwat chief Rachel Fletcher hit the nail on the head when she said that while earlier regulators may have chosen their interpretation of the remit – nowhere does it say it must be con• ned to economics. This changing strategy message – unmissable at our Congress in October, reiterated by the National Infrastructure Commission's review into regulation and centre stage at Ofgem's January confer- ence – has helped shape the thinking behind our New Deal for Utili- ties campaign (see pages 6-9), which aims to explore the need for a new social contract between utilities and the public. Utility chief executives may see regulation as a far from perfect instrument, but it is an increasingly powerful one. How the new model moves into areas once the sole p reserve of social or environ- mental policy, will be a journey to watch closely. 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