Utility Week

UTILITY WEEK | 27TH OCTOBER - 2ND NOVEMBER 2017 | 3 This week 4 | Seven days 6 | Interview Matthew Wright, managing director, Dong Energy UK 10 | Event The headlines from Utility Congress 2017 16 Policy & Regulation 16 | News SPEN denied £37m of innovation funding 17 | Analysis The energy price cap is spooking suppliers 18 | Column Removing the barriers to water market entry 19 | Opinion Legacy problems, future opportunities 20 Finance & Investment 20 | News Yorkshire Water to end offshore banking 21 | Analysis Where next for utility dividends? 22 | Analysis Chatbots and customer engagement 24 Operations & Assets 24 | High viz Yorkshire Water's Gouthwaite reservoir scheme 27 Customers 27 | News London council starts local energy supplier 28 Markets & Trading 28 | Market view Volatility in wholesale gas and power prices is now the norm 30 Community 31 | Disconnector GAS 10 | Event The headlines from Utility Congress 2017 22 | Analysis Chatbots and customer engagement WATER 18 | Column Removing the barriers to water market entry 20 | News Yorkshire Water to end offshore banking 24 | High viz Yorkshire Water's Gouthwaite reservoir scheme ELECTRICITY 16 | News SPEN denied £37m of innovation funding 19 | Opinion Legacy problems, future opportunities ENERGY 6 | Interview Matthew Wright, managing director, Dong Energy UK 17 | Analysis The energy price cap is spooking suppliers 21 | Analysis Where next for utility dividends? 27 | News London council starts local energy supplier 28 | Market view Volatility in wholesale gas and power prices is now the norm Pitney Bowes: Make self service smarter and more engaging http://bit.ly/2nAa2rC CGI: Energy Flexibility Transforming The Power System By 2030 http://bit.ly/2bR3zXB Knowledge worth Keeping Visit the DownloaDs section of Utility week's website http://www.utilityweek.co.uk/ downloads Leader Ellen Bennett Utilities must prove their legitimacy What's the most important word in UK utilities today? Legitimacy. At the Utility Week Congress earlier this month (p10), the chairmen of both Ofgem and Ofwat emphasised the need for monopoly utilities to be mindful of their legitimacy, at a time when public debate is focused on their very existence as privately held companies. Ofwat chief executive Cathryn Ross went further last week, excoriating water companies for "risking their own demise", as The Times had it, by failing to deliver the regulator's demands on cleaning up trans- parency, governance and complex financial structures. What has prompted this focus on legitimacy? The answer is the rise of Labour leader Jeremy Corbyn, which has shied the political narrative to the le and put nationalisation back on the agenda. But politicians don't pluck issues out of a vacuum: Corbyn has tapped into public dissatisfaction with utilities, and the ongoing unease with the concept of private profits arising from a public utility. As Ross identified in her speech, it's a sense that utilities are being run in the interests of their investors rather than their customers, a feel- ing that shady offshore companies are pocketing sky-high profits. For some, Ross went too far. Her tub-thumping insistence that Labour's nationalisation pledge is a "wake up call for even the hard- est of hearing" is a long way from her usually more nuanced tone, and the regulator taking to the stage to publicly condemn the sector does little good to its public image. Cynics may suggest that as she prepares to step down, Ross is looking to her own legacy and reputa- tion, mindful perhaps of the accusations of "spinelessness" being hurled at her opposite number at Ofgem, Dermot Nolan. But that would be unfair. A close read of Ross's speech tells of a regulator who is seriously shaken by the sharp swing of public debate; and is frustrated by the recalcitrant minority of water com- panies that still refuse to meet its demands (a key complaint in her speech: five or six of the 17 regulated water companies have yet to provide the regulator with requested long-term viability statements). Ross may be playing to the gallery, but perhaps she has good reason to do so. The pressure coming from Ofwat seems to be work- ing – Yorkshire Water, for example, has announced plans to end its offshore banking arrangements (news, p20). And the tougher the regulator is seen to be, the less likely energy supply-style political intervention becomes. So water company executives frustrated with Ofwat's increasingly combative style should perhaps ask themselves, would they rather answer to Cox and Ross, or Jeremy Corbyn and John McDonnell? Ellen Bennett, Editor, ellenbennett@fav-house.com

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