Utility Week

UTILITY Week 27th February 2015

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

Issue link: https://fhpublishing.uberflip.com/i/468496

Contents of this Issue


Page 8 of 31

UTILITY WEEK | 27Th FEbrUarY - 5Th March 2015 | 9 Policy & Regulation This week ECC: network firms not value for money Network firms hit back, claiming costs have fall- en since privatisation and investment has soared Battle lines were drawn this week as the Energy and Climate Change Select Committee said networks did not provide value for money, while the sector hit back, insisting the cost of Brit- ain's networks had fallen since privatisation. The ECC committee's heavily trailed report into network costs singled out Ofgem for being "too generous" in the price controls it sets for the regulated sector. It called for an independent audit of those controls, plus increased notification of price changes and harsher penalties for energy leakages. Committee chairman Tim Yeo said there was "clear evidence" that network companies were making higher profits than expected, and that the current system of network costs was "too complex". He said: "Ofgem must get its act together and scru- tinise these near monopolies more effectively. Simpler charging methodologies are needed to strengthen the market's ability to scrutinise costs and increase the pres- sure for greater cost-saving efficiencies." The Energy Networks Association (ENA) struck back. Chief executive David Smith said: "For 81 pence a day, customers get one of the most reliable energy networks in the world at one of the lowest costs in Europe." The ENA said the cost of Britain's networks had fallen 17 per cent in real terms since privatisation, and investment of almost £80 billion had secured safer, more reliable and more efficient infrastructure. Smith added: "Network companies are focused on delivering increased stakeholder engagement, raising their profile with customers and widening competition." EB WaTEr Market opening still on track for 2017 The non-domestic retail market will open in April 2017, despite renewed chaos over Ofwat's plans, says the Consumer Coun- cil for Water (CCWater). Ofwat's chief executive Cath- ryn Ross revealed last week that the regulator's plan to appoint the Water Industry Commission for Scotland to oversee the pro- gramme had been vetoed by the Scottish regulator's board. Last August, the regulator said it was winding down Open Water Markets Limited, the body initially charged with market opening, aer the Treasury refused to allow it to be classi- fied as a private body. CCWater senior policy man- ager Steve Hobbs said despite this latest change, "we expect it to stay on course" but only if "all of the players involved make sure it happens on time". A spokesperson from the Department for Environment, Food, and Rural Affairs said: "We remain on track to meet our target of April 2017." Hobbs added that Ofwat has a "vital role" in ensuring there are no further delays to the timetable and to get the market "in shape". In a letter to water company chief executives, Ross revealed the appointment of the new director of the market-opening project – to be publicly named in March – who will report directly to her. WaTEr Retail watchdog to launch in March An independent water retail compliance body is set to be launched next month before the opening of the water sector to non-domestic competition. The Utilities Compliance Assurance Body will be estab- lished on 17 March by Liberal Democrat peer and chief execu- tive of the Energy Managers Association Lord Redesdale. He said the not-for-profit body will use "regulation by a code of conduct", and added that the organisation will help prevent misselling in the sector, particularly with water perfor- mance contracts, and also help retailers and financial managers deal with data protection issues.. Lord Redesdale said that the key benefit of the scheme is that it will allow the water perfor- mance contracts to become "secure financial assets" which will be attractive acquisitions for investors. He expects the body and the code of conduct to be operating by July this year. WaTEr CCC says Suds policy is 'ineffectual' The Committee on Climate Change (CCC) has slammed the government's impending policy on sustainable drainage systems (SuDS) as "ineffectual". Lord Krebs, chair of the CCC's adaptation sub-committee, said the government's plan to make Suds mandatory for all major housing and commercial devel- opments "does not address" the barriers to its implementation. Lord Krebs made three rec- ommendations to help increase the take-up of Suds: • Withdraw the automatic right for housing developers to connect to public sewers. • Make Lead Local Flood Authorities and water compa- nies statutory consultees on new developments. • Collect data to monitor the uptake of Suds. Networks: not transparent on costs Labour leader Ed Miliband has appointed former deputy prime minister John Prescott as his climate change adviser before crunch climate talks at the end of the year. Should the Labour party take power in the general election, Miliband will attend the UN summit in Paris in December where it is hoped a new binding global agreement to tackle cli- EnErgY Prescott to advise Miliband on climate change mate change will be agreed. Miliband said in a tweet that his new adviser "knows how to knock heads together". Prescott was an "instrumen- tal figure" as the lead EU nego- tiator in 1997 in the formation of the Kyoto Protocol under which countries signed up to commit themselves to reductions in greenhouse gas emissions. On his new role, Prescott said in his Daily Mirror column: "My brief is to engage heads of state and governments, to raise their ambition. He's also asked me to bash heads together. Intellectu- ally, of course!" The Labour peer said he is "prepared to work with the cur- rent UK government" before the Paris negotiations, adding: "This should be above politics – we need to work together."

Articles in this issue

Archives of this issue

view archives of Utility Week - UTILITY Week 27th February 2015