Utility Week

12 | 12th - 18th MAY 2017 | UtILItY WEEK Policy & Regulation This week May confirms Tories' energy price cap plan tory party leader promises manifesto will feature 'credible and deliverable policies' Theresa May has confirmed that the Tory manifesto will include measures to cap energy prices. In a speech at a campaign event in Harrow, the prime minister outlined some of the key policy measures that will be included in the Conservative manifesto, which is pencilled in for publication on 15 May. She said: "We're putting together credible and deliverable policies – policies that are in the national interests, policies like protecting workers' pensions against irresponsible bosses, like capping energy prices to support working families." Her comments go beyond those in a speech to Tory activists in Wales in late March, when she signalled that the government was willing to go beyond measures to encourage customers to switch suppliers. And they follow reports last week that ministers on the Thatcherite wing of the Conservative party have questioned the government's moves to regulate energy prices, which resembles moves that were widely criticised by Tories when they were proposed by ex-Labour leader Ed Miliband in 2013. The prime minister's comments followed an attack by Centrica on the government's moves to ramp up regulation of retail energy prices. In its trading statement, the British Gas parent company said that evidence from other countries suggested price regulation will lead to "reduced competition and choice, and potentially higher average prices". Centrica said that in meetings with the government it has pressed the case for alternative ways to address its concerns, which would avoid having to resort to price regulation. DB WAtEr Severn Trent calls to enhance role of ODIs Outcome delivery incentives (ODIs) should be made more financially significant in the next price review, and there should be greater use of in-period ODIs, Severn Trent has argued in the second of its Charting a Sustainable Course publications. Called 'Designing Incentives to deliver for Customers', and available on its website, the document looks back at some of the benefits that PR14 brought to customers, and looks forward to PR19, highlighting opportunities for better outcomes. Tony Ballance, director of strategy and regulation at Severn Trent, said: "The aim of regulatory changes in the water industry are to encourage companies to put customers at the heart of all they do. Everyone is looking at the best ways to deliver for customers." EnErgY NI warns of hit to energy post-Brexit The future viability of the pan- Ireland single electricity market (SEM) is potentially challenged by the UK's decision to leave the EU, MPs have warned. A report published by the House of Commons Northern Ireland select committee says the government should address the impact any changes in its relationship with the EU's internal energy market have on Ulster. Northern Ireland's electricity system is highly integrated with that of the Republic through the SEM. Its dependence on external sources of supply will be exacerbated ažer 2021, when it will no longer generate enough electricity to meet demand. To ensure the security of supply ažer 2021 in Northern Ireland, the cross-party group of peers urges the province's Planning Appeal Commission to make a decision on the planned new 1,500MW interconnector, which will nearly triple the capacity of cross-border connections. Laurence Robertson MP, chair of the Northern Ireland Affairs Committee, said: "The region already faces the highest energy prices in the UK, causing significant harm to businesses and unacceptable levels of fuel poverty. Difficult decisions will need to be taken quickly." ELEctrIcItY Lords seek action on nuclear strategy Commercial interest in the UK's baby-nuclear plant programme will wane unless ministers announce the initial results of a long-awaited competition to find the best type of reactor, a committee of peers has warned. "The government must publish its strategy for SMRs without delay if industrial interest is to be maintained, and if commercial opportunities are not to be missed," they warn. Price cap is a 'credible and deliverable' policy Energy company SSE has published a manifesto setting out its view of the priorities for an incoming government ažer the general election. The five- point agenda includes a caution to avoid the consequences of intervention in the energy retail market, which SSE described as "intensely competitive". While SSE acknowledged a "legitimate" desire from EnErgY SSE advises against meddling in 'intensely competitive' energy market political parties to intervene in the delivery of an "essential service" to ensure "value and greater fairness", it also wrote: "SSE would caution that the energy retail market is intensely competitive and… switching levels compare favourably to comparable markets such as mobile phones or insurance." It insisted that "major investment" is being poured into the delivery of measures to improve services and transparency, including the smart meter rollout and the faster switching initiative. Such measures "should in themselves bring demonstrable changes to customers' experience and engagement in the market", it said. If the new government intervenes in energy price regulation, it must have "a clear objective with broad support", said SSE. This must be developed based on "careful consultation on both the principles and the detail and, if introduced, should be time-limited and subject to regular reviews to reflect market realities, such as wholesale costs and the charges of various environmental policies funded through energy bills."

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