Utility Week

Utility Week 22nd November 2013

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

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GAS 13 | Political Agenda 26 | I am the customer Lewis Shand Smith 28 | News Uncompetitive prices will cut market share WATER 6 | Chairman's view Colin Skellett, Wessex Water 14 | Market view Getting more for less 14 | Market view M&A activity 18 | News Water firms urged to slash cost of capital 21 | Analysis Ratings risk for the highly geared 24 | Market view Phosphorus in the water supply ELECTRICITY 8 | Interview Mikael Lundin, Nord Pool Spot chief executive 13 | News Eco costs to be moved into general taxation 22 | High Viz Tilbury closes 26 | News CBI wants more help on carbon floor price This week Leader Ellen Bennett Severn Trent's choice of an outsider looks shrewd While most of the coverage marking Liv Garfield's appointment as chief executive of Severn Trent has focused on her being a woman (shock, horror), the more significant departure is that she joins the industry from outside its ranks. The vast majority of water sector leaders are lifers, and at a time when the industry needs to change its culture, that can be a drawback. Coming from the cut-throat world of telecoms and with a foothold in retail (Garfield is a nonexecutive director of Tesco), she will be well placed to steer Severn Trent through the introduction of competition and the advent of a more customer-centric approach. She will also be charged by the company's board with securing its financial future. Shares in Severn Trent have slumped since the company saw off a hostile approach from Borealis Infrastructure Management earlier this year; a move that is now beginning to look like hubris. M&A is effectively shut down in the water sector for the next few months while PR14 settlements are hammered out. Once that's resolved and Garfield is settled in post, she will need to either restore the company's share value or steer it through a deal that satisfies the same board members who rejected £22 a share this summer. Meanwhile, it's unsurprising that energy suppliers' results reported this week received far less attention than headline- grabbing pledges to freeze energy prices (p19). There's an old saying – "never let the facts stand in the way of a good story" – that sums up the approach of politicians and the national media to the fact that suppliers' retail profit margins are flat or falling. A full Competition Commission inquiry is necessary to establish the facts independently of media spin and political agendas. The competition audit that the prime minister announced doesn't go far enough – it is too close to politicians, and too limited in its remit. However, the first audit may spark a full investigation – and the energy industry should continue to work towards this. 13 Policy & Regulation 13 | News Eco moving to taxation 13 | Politics Mathew Beech writes 14 | Market view Water firms must get value 14 | Market view M&A and the water sector 18 Finance & Investment 18 | News Water must cut cost of capital 19 | Analysis Energy company financial results round-up 20 | Market view Can energy firms access credit? 21 | Analysis Ratings risk for water firms 22 Operations & Assets 22 | High viz Tilbury power station 24 | Market view Phosphorus in water 26 Customers Energy 19 | Market view Energy company financial results round-up 20 | Market view Access to credit 21 | Investor view Martin Brough 4 | Seven days 6 | Opinion Colin Skellett, Wessex Water 8 | Interview Mikael Lundin, Nord Pool Spot chief executive 26 | News CBI wants extension to CFP exemptions 27 | Market view Utility site developments Ellen Bennett, Editor ellen.bennett@fav-house.com 28 Markets & Trading Utility Week's annual Utility Industry Achievement Awards will once again be held at the Grosvenor House Hotel in London's Mayfair. Put 9 December in your diaries for the biggest events date in the utility calendar. More than 1,200 of the great and the good of the utility industry will meet to toast the winners and share a glamorous evening of dancing and entertainment accompanied by a celebrity host. This year's categories are: Capital Project Management Award; Community Initiative of the Year; Customer Care Award; Digital Utilities Awards; Environment Award; IT Initiative of the Year; Marketing Initiative of the Year; Staff Development Award; Supply Chain Excellence Award; and Team of the Year. 9 December, Grosvenor House Hotel, London Website: www.utilityweekawards.co.uk 28 | News Uncompetitive prices will cut market share 30 Community 30 | Subscriber focus Nigel Knight, Siemens 31 | Disconnector UTILITY WEEK | 22nd - 28th November 2013 | 3

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