Utility Week

16 | 12th - 18th MAY 2017 | UtILItY WEEK This week Thames Water rebuffs criticism of finances thames insists its corporate governance code is 'directly comparable' to that of listed companies Thames Water has hit back at criticism of its finances, which appeared in the Financial Times last week. An article in the newspaper said executive pay at the water utility has "ballooned in recent years", and that its removal from the stock market in 2006 means such issues "pass unchallenged". It said former chief executive Martin Baggs received a 60 per cent pay rise from £1.29 million in 2014 to more than £2 million in 2015. However, Thames insisted Bagg's total remuneration package went up approximately 5 per cent between 2013/14 and 2014/15, and his basic pay went up just 2 per cent. The company said the reported figure in 2014/15 is higher because it is the total amount that vested in 2015, not the amount that was actually paid that year – which was £349,690. The LTIP is a long-term incentive payment to reward performance, normally over three-year cycles. Total pay for 2014/15 excluding LTIP, Thames said, was just over £1 million. The article also quoted former Ofwat boss Ian Byatt as saying: "Nearly everyone on the [Thames Water] board are investors and one cannot resist the idea that they are more concerned with money than with serving the public. The public interest is so easily forgotten and consumers are paying more for their water bills because of it." Ofwat chair Jonson Cox subsequently wrote a letter to the Financial Times, with assurances that Thames Water has now changed its board composition to comply with the regulator's principles. LV ELEctrIcItY Moorside on hold pending review Energy consultancy Inenco has called for a clear vision for the future, following reports that plans for the Moorside nuclear power station are on hold. The company's chief commercial officer, David Cockshott, said a "strong energy plan" needs to be put in place, involving a mix of different technologies, before any proposals to build the plant in Cumbria are revisited. A spokesman for the Nugen consortium, which is developing the controversial nuclear plant on the Cumbrian coast, confirmed it is "undertaking a strategic review of its options following vendor challenges". Last month, Toshiba warned there is "substantial doubt" over its continued survival ažer reporting an operating loss of more than £4 billion for the last three months of 2016. gAs A hydrogen gas grid could scale CCS costs Converting gas grids to hydrogen would "fundamentally change" the economics of carbon capture and storage (CCS), according to Dan Sadler, Northern Gas Networks' head of hydrogen technologies. The production of hydrogen for heating would provide a steady stream of demand for CCS, de-risking investment in infrastructure Sadler is programme director for the H21 Leeds City Gate project, which has outlined plans to convert gas networks in Leeds to run entirely on hydrogen as the first step towards a nationwide rollout. He said that producing enough hydrogen to meet the heating demand for Leeds would require 1.5 million tonnes of carbon dioxide to be captured and stored each year, and that converting gas networks in other cities such as Bradford and Manchester could bring the figure up to 15 million tonnes within a decade, allowing the costs of CCS to "rapidly come down with economies of scale". EnErgY Centrica warns against price caps Centrica, the parent company behind British Gas, is the latest company to hit out at the prospect of an energy price cap. It warned against "any form of price regulation" and claimed it could lead to "reduced competition", as its recent trading update reveals it has lost more than 250,000 home customers this year. The Conservative party has promised to include details of a price energy cap in its manifesto for next month's snap election. Cox: composition of board has changed Stock watch 220 215 210 205 200 195 CentriCa share priCe, five day 11 Apr 18 Apr 25 Apr 2 May 9 May CentriCa share priCe, One mOnth Centrica has lost 261,000 home energy customers since the beginning of this year, but investors were clearly expecting worse from Centrica's first quarter results, and the company's share price rose by about 1.8 per cent on the day of the update, from 198.7p to 202.3p. The British Gas owner said the losses reflected the "planned roll-off of collective switch tariffs and a greater shi… towards enhanced segmentation and customer value, not only volume". 205 200 195 190 3 May 4 May 5 May 8 May 9 May Finance & Investment

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