Utility Week

8 | 5TH - 11TH APRIL 2019 | UTILITY WEEK Policy & Regulation This week CBI backs moves to avert nationalisation Director-general outlines a three-pronged plan to improve services in energy, water and rail The director-general of the Confederation of British Industry (CBI) has backed the introduc- tion of new mechanisms to auto- matically compensate and switch customers to the best deal in a bid to head off mounting calls by Labour for nationalisation. In a lecture in Liverpool on 28 March, Carolyn Fairbairn outlined a three-pronged plan to improve services in energy, water and rail. Fairbairn said in her Roscoe lecture that Labour's proposals would do "profound harm" to the UK's economy, services and public finances. She said its plans represented a "regression" to "already failed" ways of doing things that would not succeed in the future. Fairbairn suggested nationalisation is a "blunt tool" for managing services such as energy and water. But she acknowledged that Labour's proposals were addressing public concerns about the "elusive" nature of account- ability in the areas it had identified for nationalisation. To meet these worries, the CBI head outlined a string of measures for recovering public confidence. The first is that energy companies should automati- cally move customers to the best value deal at the end of their contract unless they opt out to pay more for a particular service. Secondly, she said utilities could pay customers automatic compensation in the event of power cuts or water shortages. Finally, she proposed that companies that fail to meet performance targets should suspend payments of dividends to shareholders – with the cash diverted to address the areas where customers are being let down. DB ENERGY EDF is stockpiling in case of a no deal EDF has been stockpiling key materials to maintain operations in the event of a no deal Brexit. Angela Hepworth, policy and regulation director at EDF Energy, told a Brexit briefing event on 28 March that the com- pany had been putting in place plans for the "worst-case sce- nario" of a no deal withdrawal. Hepworth said EDF has been increasing its "strategic stocks" to boost resilience in the event of disruption to its supply chain. She also warned that "con- stant vigilance" will be needed to spot the "unforeseen issues" Brexit is likely to throw up. Hepworth said longer-term Brexit worries include access to labour, particularly in relation to EDF's new nuclear power plant construction project at Hinkley Point C. Overall though, she said energy is "one of the best set up" sectors for dealing with Brexit, giving the government "credit" for resolving the risks to the movement of nuclear fuel and materials as a result of the UK's departure from the Euratom treaty. see Analysis, page 6 WATER New alliance for joint infrastructure Ofwat has announced the funding of the water Regulators' Alliance for Progressing Infra- structure Development (water RAPID) team, which will cover strategic water transfers and joint infrastructure projects. The water RAPID team will bring together staff from Ofwat, the Environment Agency, and the Drinking Water Inspectorate into a single group. It will help create a "respon- sive regulatory regime" to address barriers to collaboration as set out in a joint letter from Defra, the Environment Agency, the Drinking Water Inspectorate and Ofwat in August 2018. ENERGY Price cap derogation extension is granted Ofgem has extended the deroga- tion it has given to three renew- able energy suppliers in relation to the standard variable tariff (SVT) price cap. Good Energy, Ecotricity and Green Energy UK were each granted a derogation until 31 March for SVTs where con- sumers have chosen a tariff that contributes to renewable genera- tion. Ofgem has confirmed that all three derogations will now be in effect until 1 September, at which point the companies will need to submit further evidence to the regulator to achieve a permanent derogation. Ofgem added that it had not assessed whether the tariffs pro- vided good value for customers. Fairbairn: Labour plans would do 'profound harm' Political Agenda David Blackman "Labour's competency took a knock last week" Whitehall is ramping up its preparation for a no deal Brexit. Two-thirds of the staff within the Department for Environment, Food and Rural Affairs (Defra) have been redeployed to work on the UK's withdrawal from the EU without an agreement, a Freedom of Information request by The Guardian has uncovered. Parliament has pledged to thwart this outcome. One way out would be a general election. The convening of a political cabinet on Tuesday would spell out the details, but this was cancelled due to uncertainty in the parliamentary timetable. Somebody wasn't told in the BBC though, which ran an article that resulted in a fall in National Grid's share price. No doubt those in Corbyn's inner circle will shed few tears for the company's shareholders. But the incident will raise ques- tions about whether Labour can be trusted to run utilities if it can't even successfully organise a press announcement. suggested this was discussed; Whitehall protocol dictates it cannot be discussed when civil servants are in attendance. Analysis of recent opinion polls shows the Conservatives would emerge as the biggest sin- gle party. However, they would lose seats to Labour, the Liberal Democrats and the Scottish National Party. Between them, the three opposition parties could muster a majority under Jeremy Corbyn's leadership. But Labour's competency as a potential government took a knock with the botched announcement of its plans to nationalise National Grid. It said a Corbyn speech on 28 March

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