Utility Week

UTILITY WEEK | 31ST MAY - 6TH JUNE 2019 | 15 This week Cadent to pay £24m for past failures Gas operator had no records of pipes in blocks of flats and left residents without a supply for too long Gas operator Cadent is to pay £24 million and establish a £20 million community fund aer an intervention from Ofgem. The regulator started inves- tigating the operator's record- keeping in 2018 aer it became aware that Cadent was leaving customers in blocks of flats with- out gas for longer than necessary. Cadent told Ofgem earlier this year that it failed to pay compensation over a six-year period to a possible 12,000 residents le without gas for more than 24 hours as required. And last year Cadent reported to Ofgem that it had no records of gas pipes in many high-rise blocks in its London network. The gas operator has agreed to rectify the issues and submitted improvement plans to deal with interruptions and improve record-keeping. The regulator has closed its investigation and will not take further action over inter- ruptions and delayed compensation payments. Cadent has agreed to pay a total of £24 million and is setting up a £20 million community fund to support customers in vulnerable circumstances. Dermot Nolan, Ofgem's chief executive, said Cadent – which is under new ownership – has "given commit- ment to improve its operations to put customers at the heart of the business, to help it address its failings and prevent further harm to customers' interests". Cadent's chief executive officer, Steve Hurrell, said: "We acknowledge that in the past, we have fallen short of customer expectations and the higher standards we have now set ourselves; for this we are sorry." JH ENERGY SSE pre-tax profits slump by a third Adjusted pre-tax profits at SSE have slumped by 38 per cent to £725.7 million, according to the firm's latest financial figures. The energy company's preliminary financial results for 2018/19 also show adjusted earnings per share are down by 32 per cent to 67.1 pence. SSE says the results reflect a £284.9 million adjusted operat- ing loss in its energy portfolio management (EPM) business, which the company first high- lighted last September, and more than £1 billion in exceptional gains from sales of stakes in three onshore windfarms and its telecoms business. Adjusted operating profits at SSE's wholesale energy business fell by 71 per cent as a result of losses in the EPM division. But SSE's networks wires and pipes business was up 9 per cent aer heavy investment in the North of Scotland electricity system to allow more renewables to connect to the grid. ENERGY 'Treble carbon price to meet 2050 targets' Carbon prices for electricity gen- eration should more than treble by 2050 and VAT on domestic energy use should be hiked to help drive emissions off the grid, according to a study published by the Grantham Research Institute on Climate Change and the Environment at the London School of Economics. Higher carbon prices will be needed across the board if the UK is to achieve net zero emis- sions by 2050. The authors propose increas- ing the carbon price for the elec- tric power sector to £40/tCO2e, up from about £35/tCO2e today, rising to £120/tCO2e by 2050. It also recommends increasing VAT on gas and electricity to achieve a carbon price of £40/tCO2e on energy for domestic heating, ris- ing to £100/tCO2e by 2050. WATER Ideas wanted to cut energy costs Severn Trent, one of three com- panies that had their business plans fast-tracked by Ofwat, is inviting companies to come for- ward with fresh ideas that will help reduce its energy costs. The utility company, which serves eight million people across the midlands and Wales, currently uses 900GWh of electricity every year, at a cost of about £100 million, its second greatest expense aer people. Severn Trent is on track to be 50 per cent self-sufficient from its own renewable energy by 2020, from sources such as anaerobic digestion, solar, crop digestion, hydro, wind, and food waste. Cadent has agreed to improve record-keeping Finance & Investment Stock watch 850 840 830 820 810 800 NATIONAL GRID SHARE PRICE, FIVE DAY 2 May 8 May 13 May 16 May 21 May 24 May NATIONAL GRID SHARE PRICE, ONE MONTH Aer being hammered by Labour's plans for renationalisation the week before, National Grid shares got a small boost on 24 May with the announcement from Ofgem that it will set the baseline allowance for network returns at 4.3 per cent for the second set of RIIO price controls. The figure is about half the current rate and the lowest ever, according to the regulator, but still represents an increase of 0.3 per cent when compared with its previous proposal in December. 830 820 810 800 790 22 May 23 May 24 May 28 May pence pence

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