Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government
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UTILITY WEEK | 16TH - 22ND JANUARY 2015 | 3 Leader Jillian Ambrose This week 4 | Seven days 6 | Interview Angela Smith, shadow water minister 9 Policy & Regulation 9 | News Capacity market may change for DSR 9 | Political agenda A look at the week in politics 10 | Market view Changes to rules on holiday pay for overtime 13 | Special report Utility Week Live: exploring change and business transformation 21 Finance & Investment 21 | News Sellafi eld contract lost 22 | Analysis What the oil price crash means for utilities 23 | Investor view Martin Schoenberg, Climate Change Capital 24 Operations & Assets 24 | High viz Sleaford renewable plant 26 | Expert view WNS 26 | Analysis First Utility on advertising 27 Customers 27 | News Oil price fall benefi ts businesses 28 Markets & Trading 28 | News Wholesale power price hits low 30 Community 30 | Reader of the week Nick Topham, Yorkshire Water 31 | Disconnector Can you aff ord not to reduce prices? The sort of cod philosophy that insists all challenge presents an opportunity might not be well received by the bosses of the big six. But it would be apt. A er months of lacklustre nancial results and steadily rising political risk, the UK's biggest energy companies have been forced to face down the unholy alliance of George Osborne and Ed Miliband as both call for retail price cuts. Brent crude prices are half what they were just nine months ago, with wholesale gas and power prices falling to multi-year lows. So the request is neither unreasonable nor unexpected. But the timing couldn't be worse. We're four months away from a general election that could bring a freeze on retail tari† s, and under a year away from the ndings of a Competition and Markets Authority probe that could call for total market restructuring. Plenty of challenge, then. But glimmers of opportunity too, for those willing to take a chance. Eon was rst out of the gate as Osborne red the starting gun on a big six price cut race. Rival suppliers who were previously sticking to their guns were le in a tail-spin by the surprise break from form. And Eon isn't the only one. When asked if there were any price cut plans in the pipeline, First Utility coolly reminded this publication that it has cut its standard tari† eight times in the past year. It's most recent price cut? Just over a week ago, we were told. The smaller hedging position, and lower costs, of small suppliers mean it is easier for them to pass on wholesale price falls. Less political pressure and fewer investment and shareholder obligations make it easier still. This is certainly what the large suppliers would maintain – and with good reason. But for the big six there is another risk on the horizon if they don't follow the frontrunners quickly with price cuts of their own. Whatever the naysayers claim, we are in a competitive market and energy prices are in the public eye: customers could vent their anger by switching in droves. Jillian Ambrose, News editor jillian.ambrose@fav-house.com GAS 9 | News No fracking near aquifers, says Labour 10 | Market view Changes to rules on holiday pay for overtime WATER 6 | Interview Angela Smith, shadow water minister 21 | News Welsh Water secures £230m EIB loan 26 | Expert view WMS ELECTRICITY 9 | News Capacity market may change for DSR 21 | News Nuclear group loses Sellafi eld contract 27 | News Ecotricity chalks up 150,000 customers 28 | News Wholesale power price at four-year low ENERGY 22 | Analysis What the oil price crash means for utilities 23 | Investor view Martin Schoenberg, Climate Change Capital 25 | Pipe up Steve Reynolds, Mobile Data Association 26 | Analysis First Utility advertising goes national 27 | News Oil price fall benefi ts businesses Knowledge worth keeping Visit the Downloads section of Utility Week's website http://www.utilityweek.co.uk/ downloads Diligent: British Gas gives board portal a warm reception http://bit.ly/1sAvsnw Rolta: White Paper: IT and OT: In Tune and On Time http://bit.ly/1qPuBgR