Utility Week

UTILITY Week 17th July 2015

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Page 9 of 31

10 | 17TH - 23RD JULY 2015 | UTILITY WEEK Policy & Regulation This week Water companies face 20-year targets Resilience duty laid on Ofwat by the Water Act 2014 will feed into the thinking of PR19 Water companies could be set regulatory targets around crucial areas of delivery such as cus- tomer service as far out as 2040, according to a consultation published last week. The consultation from regulator Ofwat asks whether setting long-term outcome delivery incentive (ODI) targets from 2020, when the next regulatory cycle begins, would lead to better service delivery and more resilient water services. The consultation, which arises from the resilience duty placed on Ofwat in the 2014 Water Act, defines resilience as "the ability to cope with, and recover from, disruption, trends and variability in order to maintain services for people and protect the natural environment, now and in the future". The consultation also highlighted the importance of financial and corporate resilience, and stated that Ofwat was considering introducing minimum standards for the information required from companies so it could assess whether its expectations on resilience were being met. Ofwat director Nicci Russell said: "This consultation is about us providing the framework that allows the ser- vice providers to focus on the longer term and to make wiser choices that increase resilience." The consultation closes on 28 August and will feed into the PR19 price review process. MB WATER Competition appeal nets Bristol £20m Bristol Water has gained only an additional £20 million in wholesale expenditure under the provisional final determination set out by the CMA. The water company will see its allowed wholesale cost expenditure increase from the £409 million set by Ofwat in its final determination, to £429 mil- lion under the CMA's provisional findings. This remains substan- tially lower than the £537 million the water company set out in its final business plan. See analysis, right; Leader, p3 ENERGY CMA in U-turn on networks evidence The CMA has decided to publish the initial submissions to its investigation into Ofgem's network price controls, but has rethought its decision to publish the provisional determination as originally planned. The CMA previously told Util- ity Week it would not publish the submissions because it had "no statutory obligation to do so". However, following a warning from former Energy and Climate Change Committee chair Tim Yeo about "any lack of transpar- ency" in its inquiry, the CMA has U-turned and will now publish the submissions by early August. Last month, Yeo told Utility Week exclusively that the CMA should make its evidence public, pointing out that "distribution companies receive less public and media scrutiny than, for example, the big six, despite the fact that their charges are a significant element in consumer bills. It is therefore all the more important that their submissions should be published at the earli- est possible date". ELECTRICITY EDF scraps plan for Bullington Cross EDF Energy Renewables has scrapped its plans for the Bullington Cross onshore wind- farm as a result of the policy changes being implemented by the government. The company was due to appeal the decision of three Hampshire councils that refused planning permission for the 14-turbine windfarm, but has confirmed it will no longer do so. EDF Energy Renewables saw its application for the 28MW windfarm, which was proposed for agricultural land near the A303, rejected in June 2014 by the planning committees of Winchester, Test Valley and Bas- ingstoke and Deane councils. The company said it had changed its mind about appeal- ing "in the light of recent government announcements on onshore wind". Good enough to drink: supplies cannot fail Political Agenda Mathew Beech "The government gets tough on renewables" In their productivity plan the Conservatives have held up as the blueprint for a strong, vibrant British economy, one key element is ensuring the country has a reliable and low carbon energy system. The way to achieve it, as set out in the Tory plan, and continue the long-term decar- bonisation of the UK's energy sector, is through a framework that supports cost-effective low carbon investment. One of the cheapest forms of is expected to cost the sector hundreds of millions of pounds, as the Treasury claws back £3.9 billion over the parliament. Tories tell you this is weening lower cost renewables off subsi- dies to prevent additional costs being placed on consumer's bills. Critics will claim this is the Tories turning their back on low cost, low carbon technologies. As always, the reality is prob- ably somewhere in between, but it remains painful for the renewables sector. low carbon generation avail- able is onshore wind, the sworn enemy of middle England. So instead of welcoming in a new era of windfarms, the government has given the sector a kicking. The promise to "halt the spread of onshore wind" was one of the first things energy secretary Amber Rudd dealt with shortly aer returning to Decc, ending the Renewables Obliga- tion a year early for onshore wind. Next up, chancellor George Osborne in his summer budget, hit the renewables sector again by removing their exemption to the Climate Change Levy. This

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