Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government
Issue link: https://fhpublishing.uberflip.com/i/538669
UTILITY WEEK | 10TH - 16TH JULY 2015 | 3 Leader Ellen Bennett This week 4 | Special report The CMA energy market inquiry 6 | Seven days 8 | Interview John Roberts, former chief executive, Manweb 11 Policy & Regulation 11 | News Scottish Water facing suit for supply failure 12 | Political Agenda The week in politics 12 | View from the chair Angus MacNeil, ECCC 13 Finance & Investment 13 | News SWW profits up 14 | Analysis The proposed BG/Shell merger 16 Operations & Assets 18 | Analysis The smart move is to act now 20 | Market view Collaborate to cut costs 21 | Market view Pumped up for action 22 Customers 22 | News GDN prices to fall 5.5% by 2021 23 | Analysis Half-hourly countdown 24 | Analysis Electricity storage 26 | Q&A Wayne Mitchell 27 | Market view Restoring public trust in utilities 28 Markets & Trading 28 | News LNG glut to drive down gas prices 30 Community 30 | Reader of the week Mark Williamson, ENW 31 | Disconnector The CMA could have hit much harder It could have been so much worse. When the Competition and Markets Authority (CMA) inquiry began this time last year, there was tub-thumping talk of breaking up the big six, reintroducing the energy pool and even setting prices. A lot has happened since then: the national agenda has moved on, competition in the energy sector has grown, we've had a heatwave, and Labour was crucified in the general election. Its price freeze lives on, however, in the mutated form of a partial price cap, set by the CMA or Ofgem, as a last resort for sticky customers. That's a bit of a curveball from the CMA, whose other potential remedies are squarely in the camp of free market economics. The authority is careful to say the measure would be temporary, and to canvass views on its potential for unintended consequences. Pre- sumably, it feels that customers' stubborn refusal to switch merits some kind of extraordinary remedy. The other remedies, which are out to consultation until the end of the month, are far more palatable to industry. Chief among them is the scrapping of the loathed "four tariff " rule. The CMA has finally acknowledged what the industry has been saying from the get-go: it is lunacy to attempt to foster competition by limiting choice. Reading between the lines, there's some insight into why Ofgem imposed such a bonkers regulation in the first place. The CMA has a bash at the regulator, calling for more "transparent and robust" regulation. It suggests a mechanism whereby Ofgem can publicly disagree with the Department of Energy and Climate Change over policy. This appears to be designed to stop political whims ending up as regulation, with Ofgem gagged from blaming its political masters. The suggestion that Ofgem set up an independent price com- parison site to foster confidence in the commercial sites is a little more le-field. Indeed, the CMA's report displays an almost feverish enthusiasm for price comparison sites which, as industries where they have penetrated further could testify, are not a panacea. The CMA inquiry was welcomed – and indeed called for – by the sector as an opportunity to reset the energy market. It doesn't go so far as initially feared, but it goes a little further than recently expected. The national media has inevitably focused on the £1.2 billion a year that customers have allegedly been overpaying, but as the story plays out, the clean bill of health for the wholesale market and the new protections for customers may start to filter through to the public con- sciousness. It's a hotchpotch of measures – and it might just work. Ellen Bennett, Editor ellen.bennett@fav-house.com GAS 16 | High viz Trelleborg 22 | News GDN prices to fall 5.5% by 2021 27 | Market view Restoring public trust in utilities 28 | News LNG glut to drive down gas prices 28 | News UK holds nerve as Ukraine gas is cut WATER 11 | News Scottish Water facing suit for supply failure 13 | News SWW profits boosted by new connections 20 | Market view Collaborate to cut costs 21 | Market view Pumped up for action ELECTRICITY 8 | Interview John Roberts, former chief executive, Manweb 23 | Analysis Half-hourly countdown 24 | Analysis Electricity storage ENERGY 4 | Special report The CMA energy market inquiry 12 | View from the chair Angus MacNeil, ECCC 14 | Analysis The proposed BG/Shell merger 18 | Analysis The smart move is to act now 26 | Q&A Wayne Mitchell Knowledge worth keeping Visit the Downloads section of Utility Week's website http://www.utilityweek.co.uk/ downloads Schneider Electric: Modicon M580. It's a revolu- tion. Everytime. http://bit.ly/1FZogqK Cognizant: Using Predictive Analytics to Optimize Asset Maintenance in the Utilities Industry http://bit.ly/1cBKZP0