Utility Week

Utility Week 6th February 2015

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UTILITY WEEK | 6Th - 12Th FEbrUarY 2015 | 19 Policy & Regulation This week WaTEr Ofwat backs Wessex in self-lay dispute Ofwat has ruled in favour of Wessex Water in a dispute with a self-lay organisation (SLO). Aquamain was contracted by housing developer Persimmon to lay the water and sewerage mains for 136 new houses at a development in Somerset. The dispute with the water company relates to the charges for adopt- ing the pipes. Wessex Water charged the SLO an infrastruc- ture charge of £91,936 for linking the new properties to the water and wastewater networks. It also charged Aquamain £81,397.36 in network reinforcement costs – needed to ensure its network can supply the new development. Aquamain took the dispute to Ofwat, claiming that by invoicing for both the infrastructure charge and the network reinforcement costs, Wessex Water was recover- ing "double its costs". However, the regulator ruled that Wessex Water is "legally entitled" to implement both the infrastructure charge and the cost for network reinforcement. gas Gas Safety Trust launches CO portal The Gas Safety Trust (GST) has launched an online portal for data and information relating to carbon monoxide (CO) poison- ing. Speaking at the launch in the Science Museum, London, GST chairman Chris Bielby said: "Providing access to CO-related information and data is an essential component of our strat- egy to improve knowledge and understanding of CO in the UK." According to NHS figures, more than 200 people in the UK are taken to hospital every year with suspected carbon monox- ide poisoning, which leads to around 40 deaths. EnErgY Offshore wind needs 'political stability' The offshore wind industry needs a "much more stable" political environment in which to operate if it is to be "competi- tive and sustainable" in the long term, say offshore wind leaders. Speaking at the Scottish Renewables' Offshore Wind and Supply Chain Conference last week, Jonathan Cole, manag- ing director of Scottish Power Renewables, said the hopes of the offshore wind industry had been "raised and rapidly confounded". Discussions about the future of the sector centred on the imminent decision on the first contracts for difference alloca- tion round, which was pushed back in September last year, and the threat of a judicial review of planning consents, called for by RSPB Scotland. Political Agenda Mathew Beech "Messages have been altered to win public approval" As the 50th anniversary of Sir Winston Churchill's state funeral passed, modern politicians paused to pay their respects to Britain's wartime leader. Then they got back to their day job – trying to win enough support to win the general election – now less than 90 days away. Within that battle, the coali- tion "caved in" to Labour's pres- sures for tighter regulations for fracking, adding all 13 opposi- tion tabled amendments to the Infrastructure Bill (see p20). clear – that Labour pushed a freeze when it would win voters, then changed their tune when it would become a hindrance. What were steadfast mes- sages from either side have been adapted to win public approval. It seems MPs have taken inspiration from Churchill, who once said: "To improve is to change; to be perfect is to change oen." Whether any party is perfect remains a completely different debate. Rather than concede defeat, environment secretary Liz Truss said the amendments were already government policy. They would put voluntary agreements on the statute paper. But saying that aer the opposition got their way does smack of someone claiming they got a joke aer it had been explained to them. But Labour is not immune to this affliction of trying to rewrite history to fit the present. Ed Mili- band's price freeze pledge, made at a time of high and increasing energy prices, seemed like an absolute winner in 2013. That is something energy sec- retary Ed Davey and his govern- ment colleagues have made very Severn Trent to cut dividend by 5 per cent Dividend reduction is better than predicted as water company accepts PR14 final determination Severn Trent has accepted Ofwat's final determination for PR14 and announced plans to reduce its dividend by 5 per cent and buy back £100 million of shares. The water company will cut customer bills in real terms over the next five years, with bills next year falling to an average £329, from £333. Severn Trent has set the 2015/16 dividend at 80.66p, a 5 per cent reduction on the current year. It will then grow the dividend annually at no less than RPI until March 2020, replacing the current dividend policy of RPI plus 3 per cent, which runs until March 2015. The 5 per cent dividend cut is better than analysts predicted – cuts of up to 15 per cent were expected. The share price responded positively, increasing from 2,170p to a high of 2,188.22p within the first 90 minutes of trad- ing on Wednesday morning. In addition, Severn Trent announced plans to move towards a net debt/RCV gearing ratio of around 62.5 per cent, in line with Ofwat's notional assumption, from its current level of 58 per cent. As part of this, it will buy back £100 million of shares. Under this refinancing programme, the water com- pany will also move almost one-third of its debt from fixed-rate debts to shorter-term floating debts, it added. Following Severn Trent's dividend cut announce- ment, Anglian Water said it has accepted the final deter- mination set out by Ofwat aer "no significant changes" were made to its proposed business plan. MB Severn Trent will cut bills over the next five years

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