Utility Week

UTILITY WEEK | 28Th March - 3rd aprIL 2014 | 3 Leader Ellen Bennett This week 4 | Seven days 6 | Opinion cathryn ross, chief executive, Ofwat 9 Policy & Regulation 9 | News Watchdogs team up to improve regulation 10 | Analysis Budget puts cap on carbon price support 12 | Market view EU reforms procurement rules 13 Finance & Investment 13 | News Windfarm investor unfazed by Budget 14 | Analysis UK energy: who wants out? 18 | Market view Is 'enhanced' status good value? 19 | Analyst view renewed takeover activity would boost share prices 20 Operations & Assets 20 | High viz United Utilities' dual-purpose bridge 21 | Pipe up Neil Kinson, redwood Software 23 | Analysis roundtable discusses the challenges of smart grids 24 | Market view Try arbitration, not litigation 27 Customers 27 | News Efficiency schemes are 'political football' 28 | Market view Digital first is the way to go 30 Community 30 | Subscriber focus Simon Bimpson, Ec harris 31 | Disconnector Competition referral can only do good "When you ain't got nothing, you ain't got nothing to lose." The wisdom of Bob Dylan could fairly be applied to the energy supply sector this week, with Ofgem expected to fire the starting gun on a Competition and Markets Authority referral on Thursday, a er Utility Week went to press. Perhaps the only surprise here was the degree to which sections of the market cranked up the publicity machine in opposition to a referral at the beginning of the week. Why bother? Public perception of energy suppliers is at an all-time low, the energy secretary is personally intervening with sledgeham- mer hints about breaking up the biggest supplier, and the regulator is set for the chop. It is hoped that a CMA referral will take some of the political heat out of the situation. It should mean that crucial decisions about the structure of the energy market are made by independent experts, not by opportunistic or defensive politicians. The CMA is more secure and thus more able to rise above political pressure than Ofgem is. It will report back a er the 2015 election, by which point which- ever party or parties are in government will be at the beginning of their term and in a position to undertake structural market reform without an eye to immediate vote-grabbing. The question of whether energy suppliers are profiteering can be put to rest – with evidence, with independence, with transparency. The biggest objection to a CMA referral is that it will create an investment hiatus. But that happened when Ed Miliband took to the stage in Brighton last year – and even earlier, with the confusion and scanty detail of Electricity Market Reform. As Nigel Hawkins writes for us this week (p14), the commitment of the major European utilities to the UK market is already looking doubtful. And as Trevor Loveday points out on p7, the carbon floor price freeze is another body blow for investment in renewables. So let's get real. The political and public agenda has changed the answer to the energy trilemma. For now, affordability and security of supply trump sustainability. As affordability is seen to by the CMA, and security of supply by a pragmatic approach to reserve capacity overseen by National Grid, sustainability will be le blowin' in the wind. Ellen Bennett, Editor ellen.bennett@fav-house.com GaS 13 | News cap will mean gas is 'biggest loser' 13 | Stock watch Tensions in Ukraine hit Gazprom's share price WaTEr 9 | News Ofwat sets new cost allocation rules 13 | News Profit up at United Utilities 18 | Market view Is 'enhanced' status good value? 20 | High viz United Utilities' new bridge 27 | News Wales delays bad debt legislation ELEcTrIcITY 9 | News Ecotricity opts for obligation scheme 23 | Analysis roundtable discusses the challenges of smart grids ENErGY 7 | Expert view Trevor Loveday 10 | Market view Impact of the Budget 13 | News centrica consortium to buy Bord Gais 14 | Analysis UK energy: who wants out? 19 | Analyst View 21 | Pipe up Neil Kinson 24 | Market view Arbitration benefits 27 | News Efficiency schemes are 'political football' Knowledge worth keeping Visit the Downloads section of Utility Week's website for special reports and exclusive research commissioned for the utilities industry. http://www.utilityweek.co.uk/downloads

• Cover