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UTILITY WEEK | 5Th - 11Th DEcEmbEr 2014 | 3 Leader Ellen Bennett This week 4 | Seven days 6 | People & Opinion 8 | Interview Jeni colbourne, mbE, chief inspector, DWI 12 | Special report cloud computing 17 Policy & Regulation 17 | News cox calls for 'radical' m&A in water sector 18 | Market view New laws of thermodynamics 19 Finance & Investment 19 | News Eon to split business in strategy overhaul 20 | Analysis The calm before the storm 22 Operations & Assets 22 | High viz Scottish renewables 24 | Market view Does water need to be smart? 25 | Market view Guarding against cyber attack 26 | Event health & Safety conference report 27 Customers 27 | News Dcc delay strands smart meter users 28 | Market view Switch on to energy savings 29 Markets & Trading 29 | Market view carbon price buoyed by reform plans 30 Community 30 | Reader of the week Steven crake, Northumbrian Water 31 | Disconnector 25 years on, a second water revolution is nigh This week, the great and the good of the water sector joined Utility Week for a reception marking the 25th anniversary of the privatisa- tion of the water sector. Speakers Sir Ian Byatt, founding director general of Ofwat; Robert Miller-Bakewell, long-standing sector analyst; and Ofwat chair Jonson Cox, speaking in a personal capac- ity, recalled the sector's sometimes colourful past as they looked forward to its challenging future. You can read some of Cox's com- ments on page 17, and a full report of the event will appear in next week's magazine. Clear themes emerged. All the speakers voiced concerns about the level of dividends some companies are taking out of the busi- ness. Severn Trent, which recently announced a rise in the dividend in the same breath as 500 job losses, may wish to take note. There were concerns over the quality of management and corporate gov- ernance: Cox suggested in no uncertain terms that some companies have made money off the back of higher gearing and associated outperformance rather than sound network management. Those days, he implied, are over. Our speakers also looked forward to the flurry of M&A activ- ity widely expected to follow the conclusion of PR14. They were adamant there is no blueprint, and that big is not necessarily better. Any water-only companies nervous about being gobbled up can take comfort from the speakers' insistence that much of the innovation in the sector comes from its smaller players. Cox's call for "radical" solutions to M&A hinted more towards a disaggregation of the value chain – something, incidentally, being played out in the energy sector this week with Eon's surprise announcement that it is to split its generation and trading business out from its renewables and customer-facing operation. The challenge of competition also looms large in water – and our interview with the Drinking Water Inspectorate's chief inspector, Jeni Colbourne, this week (p8) shows that even the experts can disa- gree. Colbourne's stark warning of the risks to water quality associ- ated with opening the market will make uncomfortable reading for Ofwat, particularly as it looks forward to upstream reform post-PR19. As the water sector anxiously awaits FD-Day on 12 December, it is at a turning point in its 25-year history. The world of the 1980s, with its City excess and wild diversification, seems a long way away – but in facing the challenges of the future, there has never been a more important time to learn the lessons of the past. Ellen Bennett, Editor ellen.bennett@fav-house.com GAS 26 | Event health & Safety conference report 19 | Stockwatch WATEr 8 | Interview Jeni colbourne, mbE, chief inspector, DWI 15 | News cox calls for 'radical' m&A in water sector 20 | Analysis The calm before the storm 24 | Market view Does water need to be smart? 31 | Reader of the Week Steven crake, Northumbrian Water ELEcTrIcITY 18 | Market view New laws of thermodynamics 22 | High viz Scottish renewables 29 | News carbon price buoyed by reform plans ENErGY 6 | Chief executive view mike Foster, Energy and Utilities Alliance 19 | News Eon to split business in strategy overhaul 25 | Market view Guarding against cyber attack 27 | News Dcc delay strands smart meter users 28 | Market view Switch on to energy savings Knowledge worth keeping Visit the Downloads section of Utility Week's website http://www.utilityweek.co.uk/ downloads O Power: The tranformation from com- modity suppliers http://bit.ly/1FQobpA Rolta: White Paper: Pull yourself together http://bit.ly/1qPuBgR