Utility Week

UTILITY WEEK | AUGUST 2021 | 7 The Month in Review EA hits Southern Water with £90m pollution fine Southern Water has been fined £90 mil- lion by the Environment Agency (EA) aer pleading guilty to 6,971 unpermitted sewage discharges. The offences relate to incidents between 2010 and 2015 in Kent, Hamp- shire and Sussex in the largest criminal case brought by the EA. The court was told Southern deliber- ately presented a misleading picture of compliance to the EA, hindering proper regulation of the company. Environment minister Rebecca Pow called the case "shocking and wholly unacceptable". The sentencing judge, Justice Johnson, said: "Each of the 51 offences seen in iso- lation shows a shocking and wholesale disregard for the environment, for the precious and delicate ecosystems along the north Kent and Solent coastlines, for human health, and for the fisheries and other legitimate businesses that depend on the vitality of the coastal waters. "Each offence does not stand in iso- lation. It is necessary to sentence the company for the totality of the offences to which it has pleaded guilty. But even that does not reflect the defendant's criminality. That is because the offences are aggravated by its previous persistent pollution of the environment over very many years." Chief executive Ian McAulay said he was "deeply sorry" for the "completely unacceptable" incidents. He added that the company has changed the way it operates to be fully transparent and operate in the right way in future. Ecotricity bidding for Good Energy In early July, Ecotricity, which already owns 25 per cent of Good Energy, revealed it had placed three non-binding offers to take over its competitor in the past month, all of which were rejected by the Good Energy board. Ecotricity issued a firm bid of 340p per share on 22 July, valuing Good Energy at £59.5 million. The 340p bid was made on the basis of creating "a green energy supply entity of more significant scale with more rounded capabilities, better able to compete with the big six and the ra of newer entrants". Will Whitehorn, chair of Good Energy, said: "This is a highly opportunistic approach by a direct competitor to the company which the board believes is not in the best interests of our shareholders, employees or customers. "We have a clear strategy, a strong lead- ership team and a proven track record in delivering on our objectives." Outlining its rationale for rejecting the bid the Good Energy board said it was "inadequate and fundamentally underval- ues the group". Ecotricity said under its plans, Good Energy would continue to operate as a separate brand, with its own identity and customer base. Ofwat 'didn't have capacity' to fully scrutinise sector in 20/21 External constraints from the pandemic and the extended Competition and Markets Author- ity (CMA) redeterminations le Ofwat unable to closely monitor all company performance, the regulator admitted in its 2020/21 report. Certain areas of policy development were also deprioritised, including the wider policy development in the business retail market, to deal with customer credit balances and in the developer market. "We acknowledge that we did not have the capacity to consider company performance across the sector as deeply as we would have liked, focusing on the performance of only one or two companies," the report said. "We intend to address both of these issues in the year ahead, assuming external constraints are eased." Following the final determinations four companies sought a redetermination from the CMA, which lasted for 12 months instead of the standard six when there were fewer cases and no pandemic. Ofwat said it had achieved "most of the milestones" in its forward programme 2020- 21, however it had to defer its consultation on the policy approach for water resource bilateral markets, key findings on the policy impact and benefits realisation of PR14, and the initial pro- posals for key PR24 areas and building blocks. Ofwat said it had, in general, been able to proceed with its key policy areas despite the challenges during the year. Highlights included launching the engagement campaign Listen Care Share to better understand consumer needs and experiences. The report assessed company performance as reported to the regulator for the 2019/20 period, which Ofwat said reveals areas of good progress including steady bill reductions, a boost to customers supported on tariffs and for vulnerable people. It noted significant service improvements around supply interruptions, which reached their lowest point since 2016, and improvements to leakage performance. The report said some companies fell short of the regulator's expectations, despite all "demonstrating some aspects of good perfor- mance in at least one area". £17.8bn Cost over the next four years of greening home heating, according to the Energy Efficiency Infrastructure Group, of which the government has currently allocated £6bn 15 Number of schemes put forward to the Regulators' Alliance for Progressing Infrastructure Development as part of resilience plans. 73% Proportion of single and upper tier councils that have now made a commitment towards reaching net zero. £793m Extra green recovery spend agreed for water companies in AMP7, revised down from Ofwat's draft decision of £850m. Company peformance not monitored as closely as Ofwat would have liked

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