Utility Week

UTILITY Week 26th February 2016

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UTILITY WEEK | 26Th FEbrUarY - 3rd march 2016 | 13 Policy & Regulation This week Whitehead: rethink emergency helpline minister says National Grid's plan to hand service over to buyer of distribution business is flawed Shadow energy minister Alan Whitehead has called for a "fresh approach" to the gas emergency number, in light of National Grid's plans to dispose of its obligation as part of the sale of its gas distri- bution businesses. Whitehead said a separate body should be created to run the 24-hour emergency gas service, or a consortium formed by the gas distribution operators. He said: "It's absolutely the right time to make that proper nationally branded fresh start which would have the confidence of at least all the distributors and certainly a much better structure in its approach to customers." He said National Grid's proposals to pass the obli- gation to "whoever happens to buy [the distribution businesses] seems to be out of line with what has been previously arranged." He added that the number at least needs its own independent branding to ensure consumers recognise it is a national service. National Grid currently owns four of the UK's eight gas distribution networks and plans to sell a majority stake in them. National Grid has said that among the solutions it is discussing with the Health & Safety Executive is the option of creating flexibility for future changes in the duty holder, which would allow a separate body to run the service. It added that "in any event, the impact of the gas distribution sale will leave the service unchanged and with clear accountability". LD ENErGY Sector divided over mid-period review The energy industry is divided over the need for a mid-period review (MPR) in the current eight-year price control for companies operating in both gas distribution and electricity and gas transmission. British Gas and consumer body Citizens Advice are leading the call for a review of all three sectors to establish whether the current price control still represents value for money for consumers and to address systemic "outperformance" by network companies against their required outputs. British Gas said "We recog- nise that much has changed since the first round of RIIO price controls were finalised which, in turn, has significantly impacted consumers' interests." Citizen's Advice said the mid-period review presents "an opportunity to identify the root causes of outperformance for both transmission and gas distribution". WaTEr Ofwat to reassess price control period Ofwat has confirmed it will review the length of the price control period beyond 2020-25. The Ofwat board, at a meet- ing in November for which the minutes were published last week, said it will maintain the five-year price control for PR19, but acknowledged the need for a "future conversation" aer 2019 on price controls beyond the 2020-25 period. The water regulator has stuck with the five-year cycle since privatisation but in 2013 energy regulator Ofgem switched to an eight-year review period for energy networks, saying it would encourage longer term thinking. In both Northern Ireland and Scotland, the current price con- trol period is six years – running from April 2015 to March 2021. ELEcTrIcITY Shake-up planned for electricity in NI The electricity market in Northern Ireland faces a major overhaul, with the regulator con- sidering allowing market leader Power NI to set its own prices. In May, the Utility Regulator for Northern Ireland will consult on deregulating the supplier in an attempt to increase competi- tion in the market. Power NI said deregulation would bring tariffs down to a 16-year low, saving domestic customers in Northern Ireland an average of £50 per year. The regulator said that, regardless of the outcome, "we will continue to regulate the retail market to protect consum- ers and prevent abuse". Whitehead: service needs strong branding Political Agenda Mathew Beech "Certainty is required to encourage investment" The starting gun for the sum- mer's in/out referendum has been fired – and divisions in the government have already become apparent, with six members of the cabinet – and London mayor Boris Johnson – all pinning their colours to the Vote Leave mast. Within Defra, things are a bit more harmonious. Environ- ment secretary Liz Truss has come out in support of the prime minister's ambition to keep the UK in a reformed EU, and water with a significant section of the Conservative backbench, and six members of the cabinet. With European environ- mental and climate change obligations pressing on the UK, especially in the wake of the COP21 agreement, discord in 3 Whitehall Place is far from ideal. This is even more pressing when utilities face further uncer- tainty at a time when certainty is required to encourage invest- ment – much of it from continen- tal Europe – to these shores. minister Rory Stewart also advo- cates this option. Over at Decc, the ministerial team are not all singing from the same hymn sheet. Energy sec- retary Amber Rudd announced her support for the 'in' campaign early on, saying in mid-January that Brexit would plunge the energy market into uncertainty. Energy minister Lord Bourne also appears to be an 'innie', having retweeted the prime min- ister's comments that "Britain is stronger, safer and better off in a reformed European Union". However, the other mem- ber of Decc's ministerial team, energy minister Andrea Leadsom, is an 'outie', along

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