Utility Week

The Month in Review Brearley Pinchbeck 6 | JUNE 2023 | UTILITY WEEK "It's not a given that prices will stay at the current level, it's not a given that there won't be further disruption to the energy system and there are numerous ways in which that disruption can manifest itself." Michael Lewis, outgoing Eon chief executive: See interview on p.12-13 The Month in Review There have been calls for all water company bosses to waive their bonuses this year. It comes aer bosses at four companies – Thames, Yorkshire, South West and Welsh – took the step of their own volition. The call comes in the same month that water sector trade body Water UK took the unusual step of apologising publicly to customers for not acting quickly enough to reduce sewage spills. This was backed with confirmation that companies in England will invest £10 billion this decade, more than treble the £3.1 billion they have currently committed to between 2020 and 2025. Despite this, union GMB is leading the calls for "all water bosses to waive their annual bonuses until Ofwat can confidently say the scourge of sewage dumping is under control". Gary Carter, GMB national officer, said: "It's grotesque for water companies to post such mammoth profits while so many are repeatedly caught dumping sewage in our nation's glorious seas and waterways. "Instead of fattening shareholders' wal- lets, this money should be used to protect the UK's fragile aquatic ecosystem." Unison assistant general secretary Jon Water bosses blasted for taking bonuses SSE halts plan to sell stake in SSEN Alistair Phillips-Davies has told Utility Week the plan to sell a 25% stake in SSEN Dis- tribution is off the table, at least for the next few years. The company sold a quarter of its holding in its transmission business in November for almost £1.5 bil- lion and had expected to kick off the process to do the same with the distribution arm this year. However, in its prelimi- nary results for the year to 31 March, the company said its strategy was now to retain 100% of its distribution net- work, which delivered a 9% increase in profits over the 12 months, to £382.4 million. Asked by Utility Week about the change of heart, SSE's CEO said the network was "in a very strong position in terms of key capital ratios" and had a clear pipeline for investment. SSE is forecasting average annual profit of £450 million from this side of the business on average over the next five years. He added: "Later on in the decade we may come back to that decision. We were certainly delighted with the transmission sale process. But there's no need to do it now. There are lots of other things to focus on, including the investment and the new ED2 settlement." Phillips-Davies also insisted the notion of spin- ning off the renewables busi- ness – favoured by some investors, most notably hedge fund Elliott – was definitely off the table. He said: "There's a real strength in this group from having exposure to this tran- sition up and down the chain. We think the shape of the group is exactly right." Richards said: "It's high time other water companies followed suit", adding: "There can be no rewards for poor performance. And there's still a long way to go for our riv- ers, lakes, coasts and seas to be clean from sewage and safe for the public." Prospect Union deputy general secre- tary Sue Ferns said: "It's right for senior leaders to reflect very carefully on taking bonus payments at a time when customers and their workforce are bearing the brunt of inflationary pressures and in the face of evident – and some high-profile – failures in service delivery." While the four bosses have been widely praised for forgoing their bonuses, Lord Hollick – who chairs the House of Lords Industry and Regulators Committee – told Utility Week it should not have been their decision to take. He said: "We urge Ofwat to take control of the situation and set out further provisions to ban bonuses at companies which have been found to have caused serious pollution incidents as part of the conditions of water company licences." A Southern Water spokesperson said Lawrence Gosden, who joined the com- pany as chief executive last July when Ian McAulay stepped down, would only receive a bonus if performance targets were achieved. Likewise, United Utilities' chief executive Lou Beardmore – who has only been in the role for five weeks – will also only take a bonus linked to performance. The remuneration committees of both Anglian and Wessex Water had yet to meet and make recommendations on bonuses at the time of going to press. Severn Trent declined to comment on bonus payments. See comment, p17 Rob Horgan, news editor Sewage spills into rivers is fas becoming a national scandal

• Cover