Utility Week

UTILITY Week 3rd October 2014

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

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UTILITY WEEK | 3rd - 9Th OcTObEr 2014 | 3 Leader Ellen Bennett This week 4 | Seven days 6 | People & Opinion 8 | Interview baroness Verma, peer and decc energy minister 12 Policy & Regulation 12 | News Severn Trent focuses on 'critical issues' 13 | Party conference report Utilities not on the agenda 15 | Analysis Labour has water in its sights 16 | Market view Unravelling unbundling 17 | Market view behavioural science and energy efficiency 19 Finance & Investment 19 | News Good Energy profits halve despite growth 20 | Analysis It's the big Numbers, stupid 21 | Investor view hæge Fjellheim 22 Operations & Assets 22 | High viz Anglian Water's raithby works 24 | Market view Getting mobility moving 26 Customers 26 | News Power cut helpline 27 | Market view chasing customer loyalty 28 Markets & Trading 28 | Market view russia-Ukraine deal cools winter gas price 30 Community 30 | Reader of the week Neil dhot, Water UK 31 | Disconnector Labour's attack on water is playing to the gallery If you've been to any pan-utility industry event over the past year, you'll have noticed that the water company representatives had a certain buoyancy, a visible sense of relief at escaping the worst of the witch hunt that has swirled around their cousins in energy. The water sector has shown a justifiable pride in pre-empting the afford- ability agenda, and reacting to public opinion by holding or cutting bills in a way that energy companies have failed to do. For Labour, though, it hasn't been enough. Shadow environment secretary Maria Eagle used last week's party conference to pledge a mandatory national affordability scheme for water firms. This wasn't a great surprise, as it rehashed Labour's position during the debates on the Water Bill. However, she also promised – or threatened – to give Ofwat greater powers to change company licences. The speech contained no further detail on this and, asked to elaborate aer- wards, Labour would say only that more detail would be forthcoming. This sounds ominous. Having benefited from a bounce in the polls on announcing its energy price freeze pledge last year, it sounds as though Labour is planning further electioneering based on water bills. Certainly, Eagle's side-swipe at water companies' profits and tax payments indicated that water company finances will be coming under the political spotlight. Given the potentially huge ramifications licence changes could have for water companies, it is irresponsible of Labour to dangle the prospect without providing detail. To do so inevitably raises suspi- cions that they are widening the scope of their successful utility- bashing campaign without clear and considered policies in place. Indeed, the riposte to Eagle's speech is that many of the things she calls for are already in place. Most water companies have or have proposed social tariffs, and Ofwat has been pushing the afford- ability agenda since 2012 at least. Most water companies did not take their allowed price rise this year, and the vast majority are keeping price rises below inflation throughout the next price review period. Dividends and corporate governance are also firmly in the regula- tor's sights. That's not to say the water sector is perfect, or there aren't issues to resolve around companies' finances. There are – but Labour would do better to understand and co-operate with ongoing reform than make promises that grab headlines but carry little weight. Ellen Bennett, Editor ellen.bennett@fav-house.com GAS 19 | News Ineos offers £2.5bn shale payout 28 | News russia-Ukraine deal cools winter gas price WATEr 15 | Analysis Labour has water in its sights 22 | High viz Anglian Water's raithby works ELEcTrIcITY 16 | Market view Unravelling unbundling 20 | Analysis It's the big Numbers, stupid 21 | Investor view hæge Fjellheim 23 | Pipe up dr Simon harrison 26 | News Power cut helpline to launch in April 2016 ENErGY 6 | Chief executive view Mike Foster, Energy & Utilities Alliance 8 | Interview baroness Verma, peer and decc energy minister 13 | Party conference report Utilities not on the agenda 17 | Market view behavioural science and energy efficiency 19 | News Good Energy profits halve 27 | Market view chasing customer loyalty Knowledge worth keeping Visit the Downloads section of Utility Week's website http://www.utilityweek.co.uk/ downloads Smartest Energy: Energy Entrepreneurs Report http://bit.ly/1kzddrn IBM: Smarter Asset Management http://bit.ly/Xx7myx

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