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14 | 19th - 25th February 2016 | utILIty WeeK Finance & Investment This week Yorkshire Water faces £55m flooding bill assets affected by December storms on a similarscaletotheflooddamagein2007 Yorkshire Water could face costs of £55 million following devastating flooding over the Christmas period. The company was forced to dra in support from fellow water companies Wessex Water, Northumbrian Water and Welsh Water to help it battle the floods. It is currently in discussion with its insurers as to the exact cost incurred. However, when flooding this severe last occurred in 2007, the cost amounted to approximately £55 million at today's prices. A Yorkshire Water spokesman said: "We don't yet know the costs of recovering from the December 2015 floods, but the impact in terms of assets affected is similar." From the aernoon of 25 December, when the rain started, it took until 9 January for Yorkshire to get customers back to normal levels of operation. Analysts have predicted that United Utilities, which was also badly affected by this winter's floods, could face costs of up to £50 million. The role of water companies in flood defences across the country is currently up for discussion. Ofwat chief executive Cathryn Ross told Utility Week last October that it was a good time for a debate on whether water firms could play a greater role, saying she could "envisage a situation in which water companies could perform useful functions around flood protection and flood defences". The government has pledged to review flood defence spending, but the Department for Environment, Food and Rural Affairs (Defra) told Utility Week it still has "no plans" to review water companies' roles. LV eLectrIcIty EDF to extend lives of nuclear stations EDF Energy has announced plans to extend the life of four UK nuclear power stations by up to seven years, amid falling prof- its in the UK and across Europe. The French energy giant announced new closure dates for nuclear power stations in Lancashire (2024), Teesside (2030) and East Lothian (2030). It said the carbon floor price and capacity market gave it the confidence required to continue to invest in the stations. The company also signalled confidence in its new nuclear power station, Hinkley Point C: "Final steps are well in hand to enable the full construction phase to be launched very soon." UK profits were down, with underlying operating profit (Ebit) in 2015 of £664 million – 15 per cent lower than in 2014. Profits at a group level plunged 68 per cent to €1.2 billion. The UK Ebit figure does not include a one-off impairment charge of £796 million relating to the fall in value of gas and coal generation and storage assets in "challenging market conditions". Water £8m restructure for Pennon Group Pennon Group has announced an £8 million restructure at South West Water and Viridor that will result in £11 million of annual savings. It also outlined £2 million of costs associated with the integration of recent acquisition Bournemouth Water into South West Water. The one-off restructuring costs will be offset by efficiencies of £11 million a year. The group said it was progressing a number of further initiatives to deliver "greater totex outperformance" at South West Water and a "more efficient cost base" at Viridor. Integration of Bournemouth Water will be "substantially complete by the end of 2015/16". Water Firms say new tax rules could hike bills Water companies have warned that stricter tax rules on interest costs proposed by the Treasury could push up customers' bills, according to a report in the Financial Times. Water UK told the paper the "great majority" of water firms would be affected by proposed changes to the tax deductibility of interest, expected to feature in next month's Budget. The industry is calling on the government to exempt them from such rules. Water UK insisted the sector presents an "exceptionally low risk" of tax avoidance, as it is heavily regu- lated and capital-intensive. Flood defences: role of firms up for discussion Stock watch 14.50 14.00 13.50 13.00 EngiE sharE pricE, 10 - 16 FEbruary 10 Feb 11 Feb 12 Feb 15 Feb 20.00 18.00 16.00 14.00 12.00 EngiE sharE pricE, FEbruary 2015 - FEbruary 2016 Apr 2015 Jul 2015 Oct 2015 Jan 2016 Aer falling from €13.90 to €13.18 last week, shares in French energy giant Engie regained ground as Utility Week went to press, following reports that the company is considering selling up to €20 billion of assets. Sources told the Financial Times incoming CEO Isabelle Kocher will be looking to speed up Engie's pivot away from thermal generation and mature markets, and towards renewables and emerging ones. It will report its full-year results on 25 February. 16 Feb € €