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| NOVEMBER 2020 | UTILITY WEEK
The Month in Review
Special administration scheme
extended to energy sector
T
he government has rushed out
new rules to provide an addi-
tional safety net for consumers
of potentially bankrupt suppliers.
As unemployment rises and energy
companies face mounting bad debts,
the House of Lords approved new
regulations that establish a "special
administration regime" for financially
distressed energy companies to
prevent the risk of disruptions to
supply.
The regulations extend the special
administration, which was introduced
during lockdown to help companies
affected by the pandemic, to the
energy sector.
Special administration would kick
in if a company's problems could not
be resolved through the supplier of
last resort (SOLR) regime.
The new regime provides a
moratorium during which financially
distressed companies will have a
breathing space from their creditors,
enabling them to pursue a rescue or
restructure.
Under the regulations, the
company's existing management
would remain in control but would
be oversee by an appointed monitor
who must be a licensed insolvency
practitioner.
The regime also allows Ofgem to
continue to exercise its regulatory and
enforcement powers, including the
enforcement of licence obligations,
without having to go to court during
the moratorium period.
In an explanatory memorandum
for the regulations, the government
justified the immediate introduction
by pointing to the "significantly
increased financial pressures" energy
companies face as a result of the
coronavirus pandemic.
These will become more acute
in the autumn and winter, it says,
giving as an example the "significant
payments" electricity suppliers will
be liable for at the end of this month
under the Renewables Obligation
scheme.
David Blackman, policy correspondent
"While in some ways we [networks] compete
with each other, I think we collaborate around
the skills agenda which is a common issue
and a common passion for a wide range of
companies in the sector."
John, Stewart, HR director, SSE
For full story visit: https://
utilityweek.co.uk/special-admin-
istration-scheme-extended-to-
energy-sector/
Top 4 stories on
utilityweek.co.uk
CMA ups Wacc for
PR19 appellants
The Competition and Mar-
kets Authority (CMA) has
increased the rate of returns
for the four companies that
appealed Ofwat's final deter-
minations for the PR19 price
control – at 0.54 per cent
higher than the regulator's
decision.
Analysis, p20
https://utilityweek.co.uk/cma-sets-new-cost-
of-capital-for-pr19-appellants/
Tonik Energy
ceases trading
Tonik Energy has ceased
trading, just days aer Ofgem
revealed the energy sup-
plier owed £8.6 million in
Renewables Obligation (RO)
payments.
Comment, p27
https://utilityweek.co.uk/tonik-energy-
becomes-third-supplier-of-2020-to-cease-
trading/
CfD auctions to
double in size
Nearly 12GW of electricity
could be delivered in the next
contracts for difference round
following an announce-
ment that the government is
doubling the size of contracts
awarded through the mecha-
nism.
https://utilityweek.co.uk/cfd-auctions-to-dou-
ble-in-size-under-johnsons-green-industrial-
revolution/
EDF MD: Why I
was wrong about
the pandemic
The managing director of
EDF's customer division,
Philippe Commaret, catches
up with Utility Week.
Interview, p26
https://utilityweek.co.uk/edf-md-why-i-was-
wrong-about-the-pandemic/w
