Utility Week

UTILITY Week 21st March 2014

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

Issue link: https://fhpublishing.uberflip.com/i/279919

Contents of this Issue


Page 12 of 31

UTILITY WEEK | 21sT - 27Th March 2014 | 13 Policy & Regulation This week 'Enhanced' firms say yes to Ofwat guidance South West Water and Affinity Water accept Ofwat guidance and get fast-tracked through PR14 South West Water and Affinity Water have accepted regulator Ofwat's risk and reward guid- ance aer pre-qualifying for "enhanced" status last week. Having accepted the guid- ance, which includes a weighted average cost of capital (Wacc) of 3.85 per cent, South West Water and Affinity will benefit from a fast track through PR14 as well as financial rewards of up to £17 million and £7 million respectively. In an announcement on the London Stock Exchange this week, South West Water said it had submitted an updated business plan to Ofwat and awaited the regula- tor's confirmation on 4 April 2014 that the new proposals were acceptable. Water-only company Affinity Water also released a statement saying it "looked forward" to the conclusion of Ofwat's risk-based review in April. According to South West Water, its updated business plan could see average prices falling by 13 per cent in real terms by 2020. The Consumer Council for Water said it was "gratifying" that the company had continued to recognise the issue of affordability. Ofwat will publish dra determinations for enhanced companies on 30 April. Last week the regulator also gave companies that have not pre-qualified an opportunity to accelerate their progress through the price review and request an earlier dra determination, by submitting new evidence by the beginning of May. If this new evidence meets the required standard, Ofwat will issue dra deter- minations for these companies in June. Dra determina- tions for all other companies will be issued in August. CM EnErgY Peers cut constraints on Eco for landlords Landlords of empty properties will be able to install energy efficiency measures available via the Energy Company Obligation (Eco), following an amendment to the scheme. Baroness Verma, parliamen- tary undersecretary for energy and climate change, presented the amendment to the House of Lords Grand Committee to "remove the constraints" land- lords currently face under the scheme. She told peers the change would make "complex" retrofits, such as solid wall installations, easier to complete. Baroness Verma said: "I believe that these amendments to the Eco order, while modest overall, will nonetheless be vital in ensuring that the scheme con- tinues to progress as smoothly as possible." Liberal Democrat peer Lord Teverson welcomed the change as "common sense" and said it was "obvious" this amendment had to be made to the scheme to allow Eco measures to be installed when a property is empty. He said: "If I were in that situation, whether I was the future owner or the contractor, that is exactly what I would want to do." Labour's Baroness Worthing- ton said the amendment "helps to clarify, simplify and tidy up a number of issues" and that "making Eco work more effec- tively is obviously a good thing". EnErgY Decc under-staffing delayed RHI policy Under-staffing at the Department of Energy and Climate Change (Decc) delayed the development of the Renewable Heat Incentive (RHI), Greg Barker told MPs on Tuesday. Appearing before the Energy and Climate Change select committee (ECCC), the climate change minister said a lack of staff within Decc was "one of the reasons that it took longer to develop the policy". He told MPs it was not down to a lack of resources, because the money was available to fill the various posts, but the fact that the people were just not put in place. He added this became "increasingly frustrating on a number of occasions" as devel- opment of the RHI and other policies was held up. The complaint comes aer a number of high-profile depar- tures from Decc last year, includ- ing former head of strategy Ravi Gurumurthy and the former director of strategy and futures Jonathan Brearley, the principal architect of electricity market reform. South West Water: on the fast track Political Agenda Mathew Beech "The Lib Dems are openly flirting with the Opposition" When the coalition first formed, the Conservatives and the Liberal Democrats promised a united government. With just over a year until the general election, the union between the pair seems to be increasingly disharmonious. Now the Lib Dems are openly flirting with the Opposition. Not only has the Lib Dem leader Nick Clegg hinted that a Lib-Lab coalition aer the general election next May is a possibility, but the policies from While Davey was scathing of Miliband's proposed energy price freeze, he has called for a "resetting" of the energy market, similar in tone to the reforms Labour proposes to take place behind the freeze. The coalition as we know it looks set to end come May 2015 – the Tories appear to prefer a minority administration rather than another coalition – so the Lib Dems are leaning towards Labour in the hope of a second term in government. the red and yellow quarters of Westminster are becoming increasingly similar. The Liberal Democrat Voice – the political blog for grass root Lib Dem members – highlighted 17 policy areas on which the two sides agree, chief among which is the call for a 2030 decarboni- sation target. While the coalition voted against setting a target in 2014, there was a notable rebellion from the Lib Dem ranks – 16 voted for the proposal. Energy secretary Ed Davey has stated a 2030 decarbonisation target will be in the Lib Dem manifesto, while Labour has been a vocal supporter of the target.

Articles in this issue

Archives of this issue

view archives of Utility Week - UTILITY Week 21st March 2014