Utility Week

6 | 4TH - 10TH OCTOBER 2019 | UTILITY WEEK A UtilityWeek c ampaign Event: Utility Week New Deal for Utilities Debate, 25 September, at RICS, Parliament Square, London W ithin minutes of the start of Utility Week's New Deal Debate, you felt that if anyone could come up with the answers, this panel could. Drawn from every corner of the utilities sector, including energy retail and genera- tion, water regulation, networks, and social inclusion – and featuring the architect of the Climate Change Committee's net zero report – this was one big line-up. Nevertheless, it was a panel facing huge questions on how utilities can reverse the legitimacy issues that plague them, while ensuring their business models, technology and service offerings rapidly scale up to meet their climate change obligations. Few punches were pulled in a straight- talking debate about what has always been a fragmented sector, and one now undergoing fundamental change. Yet by close of play there was consensus emerging too, around the need to put cus- tomers far more at the heart of future busi- ness and policy planning, technological innovation and efficiency and usage solu- tions if we are to incentivise them and see industry deliver the nation's decarbonisation target on time, or sooner. Call to action Jonson Cox, chair of Ofwat, made no apology for pushing hard to "encourage – and where need be to compel – the water industry to reinvent itself ". "I have to say some in the sector lost sight of their full range of responsibilities as pub- lic service utilities," he said. Yet, referencing both its Back in Balance campaign, (aimed at rebalancing delivery for customers alongside delivery for investors), plus the sector's Public Interest Commit- ments, (including becoming carbon neutral by 2030), showed ambition and real pro- gress, he said, albeit it was "a bit of a shame it took the regulator to be the lead". Changing the constitution of companies to put customers and the environment on a level playing field with the interests of owners was another key message. "I don't see that as a threat to ownership. Investors remain very important to utilities. I think it is actually part of securing the legitimacy of a long-term return for investors as well as customers and the public." Meanwhile, former cabinet minister Lord Deben was unequivocal about the folly of nationalisation of the sector: "You can't get the state to police itself effectively. (We seem to have seen a little of that just recently.) There is an arrogance about the state which always happens, because they feel they're doing the best for everyone and therefore they're right. "So... we really do have to be very con- cerned about the importance of regulation, about the integrity of regulation, about the value of regulation and about regulation being able to keep up with the changes that take place." Describing climate change as the "biggest material threat to humanity", the environ- ment champion's rallying call was: "I want to say to the industry, above all... create a relationship... a trust, in order that people take you seriously. Then I want you... to make doing the right thing easy and doing the wrong thing difficult. "And, for goodness sake, explain these things in a language that people understand. Then I think we'll get a long way." The chief executive of Northern Power- grid, Phil Jones, felt it was important to strike an objective and evidence-based balance for customers, but agreed there was much to be done about how this message was communi- cated in future. Jones is also chair of the Energy Networks Association and agreed that nationalisation would be "a disaster for customers". He also queried why regulators should Debating the deal There were big questions at the New Deal for Utilities Debate – and some of the finest brains in the industry were there to tackle them, reports debate chair Suzanne Heneghan. The panel: Jonson Cox, chair of Owat Lord Deben, chair, the Committee on Climate Change Phil Jones, chief executive, Northern Powergrid; chair, Energy Networks Association Kerry Scott, global practice leader for social inclusion, Mott MacDonald Michael Lewis, chief executive, Eon UK The agenda The debate focused on two critical questions for energy and water companies today. • Trust, fairness and legitimacy: Do utilities now have the perfect opportunity to rebuild trust, offer greater fairness and reverse the increasingly negative populist view of them, or can the legitimacy gap never fully be restored without a move towards public ownership? • Climate change and technology: As an industry that finds itself at the heart of a transforming market and operating environment, how can utilities ensure the decarbonisation journey improves their business, service and relationships with customers? The background In January, with an industry at a crossroads, Utility Week launched its New Deal for Utilities campaign amid rife sector uncertainty about • policy and regulation • nationalisation • technological change • extreme weather events And all this, with public trust in utilities at an all-time low. Our snap public poll found a mixed picture, many seeing utilities both as part of the problem, and the solution. Following industry calls for an honest dialogue on the way ahead, Utility Week convened the New Deal for Utilities Debate. Event sponsor:

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