Utility Week

UTILITY Week 8th September 2017

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UTILITY WEEK | 8TH - 14TH SEPTEMBER 2017 | 9 Policy & Regulation This week Councils to charge by hour for streetworks NJUG raises concerns over proposed extension to controversial lane rental scheme The government has unveiled new powers for councils to charge utilities by the hour for carrying out streetworks on key routes as part of a wider plan to extend the controversial lane rental scheme. The government's changes to the scheme, which has been piloted in Kent and Greater London, include allowing charges to be imposed on an hourly rather than a daily basis. Under current regula- tions, utilities have to pay up to £2,500 a day to carry out works on routes where lane rental schemes apply. The government says the scheme discourages utilities from carrying out work at peak times, and incentivises them to collaborate when digging up congested routes. However, NJUG chief executive Bob Gallienne raised concerns about the mooted extension to the scheme. He said: "Lane rental schemes make it harder for util- ities companies to deliver vital infrastructure and value for money for consumers while minimising disruption. A consultation paper, published at the weekend, out- lines a series of options for the future of the lane rental scheme. The three options are to scrap lane rental, retain only the existing schemes in London and Kent, or to roll it out to other local authority areas. "This consultation is a chance to explore how disrup- tion can be reduced for road users at the same time as minimising the policy burden on utilities companies," said Gallienne. "NJUG is working with stakeholders to develop a future strategy for streetworks, setting out a blueprint for delivering world class streetworks." DB ENERGY New year price cap for vulnerable users Ofgem is planning to introduce its mooted cap on the bills of the most vulnerable customers early in the new year. The energy regulator plans to consult on its proposal for a "safeguard tariff " that would prevent the poorest households from being put on standard vari- able tariffs, which are more than £300 a year higher than the best deals available on the market. A fast track consultation on the shape of the tariff has been pencilled in for this month. Ofgem chief executive Dermot Nolan said in July that the regu- lator was exploring the exten- sion of the recently introduced cap on pre-payment customers to the approximately two million households that are eligible for the Warm Homes Discount. ELECTRICITY Hinkley connection costs disputed Ofgem has challenged National Grid on the proposed cost of upgrading the transmission net- work to connect the new nuclear power plant at Hinkley Point C. The regulator believes the Hinkley Seabank project could be delivered for about 20 per cent less than the £839 million quoted by the transmission operator. The work would include rein- forcing and reconfiguring power lines at Hinkley Point and swap- ping out a 132kV double circuit between Bridgwater and Seabank with a 400kV replacement. The regulator said National Grid had "not fully justified" the £65 million estimated price tag for the new T-Pylon technology it intends to use, nor the £116 million cost contingency it has included to reflect the risk of delays due to extreme weather. To drive down the figure, Ofgem is considering ways to introduce competition to the delivery of the upgrade. WATER Wholesalers reject negotiable tariffs Most wholesalers believe whole- sale tariffs should not be nego- tiable, according to research by Utility Week's sister title Water. Retail. A series of interviews with senior representatives from wholesale companies in the non- household water retail market have revealed that most whole- salers believe the current tariff framework is fit for purpose. Only Southern Water chief executive Ian McAulay said he believes these tariffs should be negotiable. "It's a market," he said. "By definition, in markets, things are negotiable. We have to be open to the way that markets normally operate." Utilities pay £2,500 a day on lane rental routes Political Agenda David Blackman "The ding-dong over energy costs is likely to get noisier." The temperature of the debate about energy costs rose several notches in this week. Utilities have been seeking to deflect the ire over rising energy bills onto environmental levies, and energy companies have reportedly launched a fresh bid to push the costs of the low-car- bon transition onto the shoulders of taxpayers rather than energy bill payers. The Energy and Climate Infor- mation Unit, a green-leaning think tank, in turn tried to shi Helm's past critiques of renewables suggest that sub- sidies for more expensive and untried technologies will be lined up for the chop in his review. However the ultimate call on curbing costs will be made by the government. And the debate on energy costs look set to figure prominently on the sidelines of the political party confer- ences. As the countdown to the review's October publication nears, the ding-dong over energy costs is only likely to get noisier. the blame for price rises onto the distribution network operators, accusing them of exploiting their local monopolies to trouser excessive profits. The Energy Networks Association was quick to rubbish that analysis as being based on old data. All of these groups are trying to capture the ear of Professor Dieter Helm, the government's choice to chair its snap review of energy costs. The issue isn't going to dissi- pate soon judging by last week's figures from Ofgem that showed the gap between the big six's standard variable tariffs and the cheapest deals on the market has widened this year.

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