Utility Week

UTILITY WEEK | 27TH MARCH - 2ND APRIL 2020 | 11 Policy & Regulation O n 31 January 2020 the first two cases of coronavirus in the UK were confirmed. Two Chinese nationals staying at a hotel in York tested positive for the disease and were whisked to a specialist unit for treatment of infectious disease in Newcastle. Meanwhile, the first flights repatriating Brit- ish nationals in China returned to the UK, with passengers placed under quarantine. Few would have imagined then that 50 days later, we would be operating in a world where schools have closed to all but the chil- dren of key workers, supermarket shelves are being continuously ravened by panicked consumers seeking to stockpile for the seem- ingly inevitable scenario of extended self-iso- lation in their homes, and the UK economy – now functioning from the kitchen tables of a threadbare crew of home-based workers – is experiencing conditions that have never been seen outside wartime. Over the past few weeks, Utility Week has been following closely the escalating responses and concerns of companies oper- ating in the UK's energy and water sectors as they attempt to maintain business continuity and resilience in these unprecedented times. In this report, we review some of the key themes and stories that emerged during the first 50 days a‹er the virus hit our shores and consider some of the challenges yet to come. As the story continues to unfold, Util- ity Week will go on providing insights and updates on a rolling basis, as well as host- ing expert opinion and advice for companies struggling to maintain services and develop- ing helpful summary reports on and webi- nars on key developments. All of our latest coverage of the coronavi- rus outbreak and its impact on UK utilities, can be found on a dedicated page on our website: utilityweek.co.uk/tag/coronavirus At the end of January, the UK registered its first case of Covid-19 infection. Just 50 days later the country had changed beyond all recognition, as Jane Gray reports. Meanwhile, in the energy networks, the ENA issued a confident message on emer- gency response. One network director who did not want to be identified told Utility Week that companies urgently need to understand how this particular emergency will affect their ability to deploy workers on key opera- tions and maintenance activities. "We are prepared for a stage where the country is in lockdown," he said. "But we need Ofgem to be very clear about what they expect from us in this very unusual situation. "For instance, if we get to a full-blown pandemic status, we would want to focus on sending workers out only to jobs where they are keeping the lights on. But we need to know that we're not going to end up in some inquiry because we didn't do such and such that the licence stipulates." Regulatory disruption From water companies preparing for the start of a challenging new AMP period in April to networks in the throes of the RIIO2 price con- trol negotiations, questions are being asked about whether they will be held to testing ramp-ups in performance and whether time- lines for consultations and final determina- tion will remain in place as planned. At the time of writing, Ofwat was yet to comment on whether companies will be held to account on all their existing performance targets for the new AMP – though Utility Week understands from a senior company leader that the regulator has participated in a "reassuring" dialogue with them. On 17 March, however, Ofgem confirmed to Utility Week that open hearings due to take place in March and April as part of the RIIO2 process had been cancelled while the regula- tor considers alternative options. A couple of days later, new chief execu- tive Jonathan Brearley issued a more fulsome statement on the "pragmatic" approach Ofgem will take to regulation while the nation squares up to the coronavirus crisis. This included a hint that further changes to the timeline and methods of engagement for the RIIO2 process are likely. Brearley also referenced the regulator's expectations of energy suppliers during the pandemic (see p9). He emphasised that the regulator's focus for monitoring compli- ance will be on ensuring that companies are taking action to "protect consumers from immediate harm, particularly vulnerable customers or where customers are at risk of going off supply. "Where companies can demonstrate that any compliance issues have resulted from prioritising efforts to protect customers and security of supply," he added, "we will take full account of this in any decisions we take." Supporting customers Since the seriousness of the UK outbreak began to become clear, a variety of energy suppliers had already moved to assure cus- tomers suffering from the widespread eco- nomic fallout that they needn't immediately add energy bills to their list of worries. EDF Energy was among the first to say it will consider delayed payments for custom- ers affected by COVID-19. Although statements like these send the right noises to worried consumers, one sup- plier chief executive frankly told Utility Week they will quickly be shown up as "meaning- less" unless significant and targeted govern- ment support is made available for those struggling to pay their bills: "Either that, or a lot of suppliers will go to the wall." While suppliers continue to operate, they continue to be responsible for fulfilling their responsibilities in the national smart meter rollout – a programme that has generated significant speculation in the last week. On 11 March, the energy systems data services company Electralink warned that continued overleaf

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