Utility Week

UTILITY WEEK | 1sT - 7Th AUgUsT 2014 | 3 Leader Ellen Bennett This week 4 | CfD special 6 | Opinion Dale Vince, Ecotricity 9 Scottish referendum 10 | Ed Davey and Fergus Ewing head to head 12 | Regulation Untangling the energy sector 15 | Investment Independence spooks investors 19 Policy & Regulation 19 | News CMA probes wholesale markets 20 | Market view Is breaking up the best way to meet water competition? 21 Finance & Investment 21 | News Drax first half profits take unexpected hit 22 | Market view Utilities aren't the boring investments they once were 24 Operations & Assets 24 | High viz Wessex Water's 'sewage Week' 26 | Market view should water embrace smart meters? 27 Customers 27 | News Thames pays price for misreporting 28 Markets & Trading 28 | News UK energy markets rocked 30 Community 30 | Subscriber focus sahar Danesh, IET 31 | Disconnector Effects of Christmas storms rumble on Once again, the Christmas storms have been in the headlines, with this summer's coverage dominated by the £8 million UKPN and SSE are paying in charitable donations and customer compensation. But buried on p10 of the Ofgem-commissioned report by Energypeople is a potentially far more significant outcome: a comment that seems to indicate the possibility of a central body co-ordinating how regional resources are allocated in response to such events. The report identifies the failure of long-standing gentlemen's agreements between the networks to send one another emergency resources as a key reason for UKPN and SSE's slow response to the storms. There is no suggestion that the other networks were holding out unreasonably: they were recovering from one round of storms and braced for another. As the report says, even in light of changes Decc is making to the informal agreement, "it will remain the case that companies will need to be confident they can successfully manage events affecting their own customers before loaning resources to others". However, the report goes on to examine some of the "key trade- offs" Decc is exploring. It says: "Potentially a central organisation may be given the role of allocation of scarce resources at a strategic level for the industry as a whole. The latter option is counter to the autonomy of the com- panies and the voluntary basis on which they have supported each other since before the industry was privatised in 1990." This would be a major intervention, taking autonomy away from the networks at the very times of crisis when they most need to focus on their customers. It is likely to face opposition from the industry, who have been successfully operating an informal arrangement for nearly 25 years. With the publication of this report, and the £3.3 million donation to charity announced today in addition to £4.7 million of compen- sation already paid by the two southern networks, Ofgem and the industry hope to draw a line under the painful events of last Christ- mas. But, as this document hints, they could have more far-reaching consequences. Ellen Bennett, Editor ellen.bennett@fav-house.com Utility Week is taking a summer break, and will be back in print on 29 August. Meanwhile, you can keep up with all the news and analysis at utilityweek.co.uk. gAs 19 | News shale drilling licences up for grabs 27 | News green Energy to offer dual fuel 28 | News Unease over Russia- Ukraine crisis WATER 7 | Expert view Trevor Loveday 20 | Market view Retail competition 25 | Pipe up Infrastructure 'adequate for now' 26 | Market view smart meters for water? ELECTRICITY 6 | Chief executive's view Dale Vince, Ecotricity 21 | News Green profits at scottish Power 28 | News Capacity market plans approved EnERgY 19 | News Europe mulls 30% efficiency target 19 | News Transmission charges shake-up 21 | News Investment steady at national grid 22 | Market view Utility stocks get exciting 23 | Investor view Clarity is the key to private investment 27 | News ssE and UKPn pay £8m after storms 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 Smartest Energy: Energy Entrepreneurs Report http://bit.ly/1kzddrn

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