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UTILITY Week 21st April 2017

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16 | 21ST - 27TH APRIL 2017 | UTILITY WEEK Policy & Regulation This week Price differential cap a 'likely' intervention Former Npower chief says the government will act on threats to intervene in energy retail market Former Npower chief executive Paul Massara has predicted min- isters will act on recent threats to intervene in the energy retail market, with a cap on the differ- ence between suppliers' most expensive and cheapest tariffs the most likely outcome. Massara, who is now chief executive of North Star Solar and was recently appointed to the board of blockchain company Electron, told Utility Week: "We're waiting to see what they will do." "I think probably the most likely position is they cap the differential between standard variable tariff [SVT] and non-SVT deals for a portion of the market," he said. "Already we have prepayment meters, which have a regulated rate. What you might see is a cap between the differential on more of the market, or you might see an expansion of the fixed-rate cap to more customers – maybe vulnerable customers." Massara said the government has now associated itself too closely with market intervention to back away without taking action. "Theresa May has come out time and time again and said 'we will intervene if we don't think mar- kets are working correctly'. There are only so many times you can say that before you have to do something." But Green Energy chief executive Doug Stewart warned that introducing price regulation in the form of a capped differential between tariffs will have unintended conse- quences. "The SVT is where the real price of electricity is," he claimed. If a cap is put on the difference between SVTs and the cheapest deals on the market, "all the cheap deals will creep up towards it" and "will disappear". JH WATER Retailers call for wholesaler scrutiny Water retailers have called for Ofwat to collect and monitor wholesaler data, as well as infor- mation from the market operator and retailers, in the new market. In its response to Ofwat's consultation on monitoring the business retail market, retailer SES Business Water said it was "already identifying issues" with gaps in data provided by whole- salers for market opening, which was "significantly impairing" its ability to provide prices and quotations to customers. "We would therefore urge Ofwat to request a report from MOSL on the gaps existing in the market dataset and to take immediate and direct action to require wholesalers to fulfil the data requirements," it added. Scottish retailer Business Stream insisted Ofwat should collect data from wholesalers and customers, as well as retail- ers and the market operator, to "gain an accurate picture" of whether the market is working. The regulator said it does not intend to alter the scope of the information request at this time. ELECTRICITY Grid signs European balancing agreement National Grid has signed an agreement with 18 other grid operators around Europe to develop a system to enable the sharing of balancing services across the continent. The manually activated reserves initiative aims to create a pan-European platform for trading frequency response services via interconnectors. The memorandum of understanding signed by the transmission system operators sets out guiding principles for the successful implementation of a common platform, which has a 2022 start date set by the European Commission. WATER SWW fined after not reporting pollution South West Water (SWW) has been fined £70,000 and ordered to pay £19,023 costs aer pleading guilty to breaching its environmental permit for Ham Lane combined sewer overflow (CSO), in a case brought by the Environment Agency. About 150 fish were killed as a result of a sewage discharge from the CSO into a stream in Woodbury, near Exeter. The spill, in September 2014, was caused by a blockage. Water firms must report any fish kills that occur following a pollution incident, but SWW failed to report it to the Environment Agency. A witness alerted the Agency aer seeing SWW staff collect and remove dead fish. Massara: government now too close to back away Political Agenda David Blackman "The election is an opportu- nity for fresh thinking." They say a walk can clear the head. In Theresa May's case, it seems to have done the trick. Aer spending five days in Snowdonia before Easter, the prime minister came down from the mountains to make this week's dramatic announcement that she will be holding a snap general election on 8 June. By the time this issue of Util- ity Week is published, the vote to dissolve Parliament should have taken place and the so called "purdah" rules will have kicked Ukip threat has faded since the referendum, providing May with more room for manoeuvre. And, according to a recent poll, even though windfarms are hated in the Tories' rural heartlands, a majority of the party's voters actually support them. If May is serious about keep- ing the lights on and bills low, she should use the upcoming election to start building a policy that has more to do with the national interest than appeasing her own backwoodsmen. in, putting all government busi- ness on hold. The election provides an opportunity for fresh thinking. It could allow, for example, the Conservatives to water down their opposition to onshore windfarms. While the delivery of the nuclear programme remains bedevilled, the case for onshore wind continues to grow. A report last week suggested up to 1GW of capacity could be installed without requiring any subsidy thanks to plummeting costs. The Tories had legitimate worries about Ukip, which made opposition to windfarms a signature policy at the last general election. However, the

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