Utility Week

UTILITY WEEK | 24Th - 30Th JUnE 2016 | 9 Policy & Regulation This week Pennon gears up for market opening Company is the seventh to apply for a licence to operate in the English water retail market Pennon Water Services is the latest company to apply to Ofwat for a licence that would allow it to operate in the English water retail market. The company has applied for a water supply and sewer- age licence. It said it intends to develop services for business customers across Great Britain. A total of seven companies have now applied for licences since Ofwat opened the application process for those wishing to provide retail services in the new mar- ket, which will open next year. Scottish supplier Castle Water bought Portsmouth Water's business customer base when the water-only company said it would exit the market. Castle subse- quently applied for a water supply and sewerage licence, and has set its sights on English market expansion. Fellow Scottish retailers Business Stream, Cobalt Water and Clear Business Water have also submitted applications, along with Thames Water Commercial Services and Northumbrian Water Business – which has rebranded as Wave. Other suppliers, including new entrant Everflow, are considering buying into the English market, and Veolia UK wants to grow its retail activities in the UK water market. In March, Severn Trent Water and United Utilities said they would team up and create a new, separate retail business, which was subsequently named Water Plus. Utility Week understands Anglian Water is also set for a rebrand, along with at least one other WASC. LV Gas Challenge to fracking ruling has 'no merit' "It is hard to see that there is any real legal merit" in challenging the approval of fracking in North Yorkshire, law firm Bond Dickin- son has told Utility Week. Friends of the Earth and Frack Free Rydeale have threatened legal action against North Yorkshire Council's decision last month to approve Third Energy's plans to test hydraulic fracturing at a well near the village of Kirby Misperton. According to Claire Brook, a partner at Bond Dickin- son, which represents companies in the oil and gas sector, the cam- paign group is arguing that Third Energy's well and its nearby Knapton power plant should be assessed as a single project. However, this argument has been presented by Friends of the Earth twice already; once in a letter of objection to the appli- cation and also in a Queen's Counsel opinion. However, the Queen's Counsel for North York- shire Council said the "point goes nowhere" and should be ignored. WaTEr Ofwat sets out plans for sludge market Ofwat has set out how the sludge technical working group will help design and implement a new competitive sludge market. As part of its Water 2020 proposals, the regulator is pro- moting greater use of markets in sludge treatment, recycling and disposal. Ofwat has timetabled a series of meetings at which the techni- cal working group will discuss each of the main design features. Each meeting will centre on a particular theme of the design of the sludge mechanism. The next meeting is due to take place in early July, and will look at assessing bids to undertake sludge services and the form contracts will take. EnErGY Suppliers should face 'stress test' Green Energy has called on Ofgem to "stress test" new sup- pliers to ensure they are capable of providing utility services and avoid them making "eye-water- ing losses". The comments from Green Energy's chief executive, Doug Stewart, were in response to the energy regulator's consul- tation to protect consumers' credit balance if their supplier becomes insolvent. In the letter to Ofgem, Stew- art said: "The scenario in energy where almost anyone now can enter the industry, use consumer money as working capital and make eye-watering losses while holding customer money is, in my view, a derogation of duty." Pennon will develop services for businesses Political Agenda Mathew Beech "There is a chance to hit the reset button for energy" An almighty convergence of events presents an opportunity for accelerating energy industry reinvention. Whatever the result of the EU referendum, the UK has a chance to re-imagine its relation- ship with Europe, the way our energy market functions and how it fits in with the European single energy market. The sector is clear: it wants to get closer, whether we, as a nation, have decided to stay in Europe or not. The Competition and Markets minister and/or secretary, as well as a new water minister. With all of this going on, there is a chance for the govern- ment – provided it's not too distracted with the referendum fallout – to hit the reset button for the energy sector. The political landscape has shižed – as have attitudes. There is an opportunity for the powers that be to take the opportunity to transform the sector and significantly alter the way the companies in it operate. Authority (CMA) has also pub- lished its final remedies, which the government has said it will implement in full as it aims to boost competition and encourage consumer trust in the sector. Finally, the Energy and Climate Change Committee has called for National Grid's system operator role to be removed "as soon as possible" to avoid conflicts of interest that would "undermine" the development of low-carbon infrastructure. This comes coupled to an expected government and cabinet reshuffle in the wake of the EU referendum vote, which could leave us with a new energy

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