Utility Week

UW October Digital edition

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Page 5 of 43

6 | OCTOBER 2020 | UTILITY WEEK The Month in Review Networks gang up on Ofgem over 'flawed' draft determinations T he energy regulator has been accused of making basic errors and risking resilience, safety and the green recovery in its approach to the RIIO2 price controls. Official responses to Ofgem's dra determinations on gas and transmission companies' business plans were submitted at the start of the month. Points raised included: • SP Energy Networks became the first company to suggest an appeal to the Competition and Markets Authority if Ofgem doesn't change its stance. It pointed to a "flawed" benchmarking approach to adjust totex allowance as one of many errors it claimed Ofgem had made. • National Grid warned that incentive arrangements "skewed" towards penalties will make networks overly cautious and averse to taking any risks. Chief financial officer Andy Agg also complained that the incentives on offer to networks in RIIO2 are significantly weaker than those available to water companies following the PR19 price review. • Wales & West Utilities claimed the proposed cuts to its iron mains replacement work could mean the Health and Safety Executive refusing to sign off the plans. The gas network said Ofgem's disallowance of vital work in its RIIO2 business plan could lead to more than 6,600 additional gas leaks by 2030, of which almost 600 would be "gas-in-building" events. It said the Grenfell incident had shown that such dangers are "unacceptable to society". • However, Citizens Advice said Ofgem was still being too generous to the networks, arguing that the regulator would be justified in cutting another £1.7 billion from their revenues over the period. Chief executive Gillian Guy urged Ofgem to "hold its nerve in the face of the significant pressure from the networks and look at whether it can go further". For a breakdown of the key facts and figures on RIIO2, see p24-25 "Cold weather always hits fuel poor households hard. This winter, the mixture of reduced incomes, higher energy costs and Covid-19 will be a lethal cocktail for thousands of vulnerable people." Adam Scorer, chief executive of NEA Utility Week regularly rounds up the key appointments and people moves across the sector. Here are a few from the past month. Sara Vaughan, Eon's political & regulatory affairs director, will depart in November aer 23 years with the company. The move is part of a restructure aimed at decentralis- ing key functions. Chief executive Michael Lewis said Vaughan had "always been able to positively influence the development of energy policy in the UK, even at the most challenging times". Expedia senior vice president and general manager Ben Blake is set to join Ovo in mid-November as chief executive of its flagship brand Ovo Energy. His new role, which will also see him become chief executive of the company's Smart Home brand, sits under the leadership of Adrian Letts, who remains chief executive of Ovo Energy Retail, which also incorporates the SSE brand. Paula Rosput Reynolds – currently a director at General Electric – will succeed Sir Peter Gershon as chair of National Grid next year. Chief executive John Pettigrew described her as bringing "a wealth of board level experience leading global companies in the energy and financial sectors". Dr Toby Willison, executive director of operations and former acting chief executive at the Environment Agency, will join Southern Water as natural capital and environment director from November. His role will include overseeing the Water for Life programme, sustainability and natural capital and continuing work to build partnerships with key stakeholders, regulators and government. ON THE MOVE For full coverage of these and other responses to the draft determinations, go to https://utilityweek.co.uk/ tag/riio2/

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