Utility Week

UTILITY WEEK | 9TH - 15TH MARCH 2018 | 9 Policy & Regulation asked about whether companies should be allowed to set their own capital structures if they vary widely from Ofwat's notional struc- ture, and whether companies with higher gearing should receive a di erent cost of capital. He also held out the prospect that the current 25-year notice period on a com- pany for revocation of its licence might be too long. In a clear warning to companies, Cox said: "We're not proposing to go there, but unless the industry moves forward on the steps I have indicated above, and achieve a 'reset', these existential questions may be pressed on us." In case the chief executives and water company executives present at the confer- ence were leƒ in any doubt about the pres- sure under which they „ nd themselves, Cox's speech was followed by the secretary of state himself, Michael Gove. He repeated his excoriating criticism of companies for their corporate behaviour, executive pay and – as he has it – lack of investment in long-term infrastructure. He praised Cox and the Ofwat team and promised to give them any powers necessary to ful„ l their agenda. As the speeches came to an end, the chief executives and investors were largely silent – re‰ ecting, perhaps, that it would be a brave water company that takes on Cox and Gove together. Richard Khaldi @RichardKhaldi Ian McAulay - CEO of @SouthernWater - dismissing the relevancy of references to what the #water sector has done since privatisation: #water companies have to say why it's better now and why it will keep getting better not harking back to the past @WaterUK #city2018 Water UK @WaterUK Michael Roberts concludes his keynote speech stating that we must "seize the opportunities open to us to exercise our responsibility in acting in the public interest". Claire Forbes @cf2421 Great to have a shout out for @ofwat's #sparkinnovation campaign from @OfwatChair at #city2018 this morning. NatInfraCommission @NatInfraCom Installing water meters to help water usage can work only with greater degree of obligation. Install street by street not house by house says Sir John Armitt @ WaterUK #city2018 Suzanne Heneghan @SuzanneHeneghan @YorkshireWater CEO Richard Flint tells @WaterUKEvents #city2018 companies "meeting not beating targets is not the place to be... we should not be led by minimum standards" Richard Khaldi @RichardKhaldi @michaelgove at @WaterUK conference has just listed out the salaries of #water company CEOs - several of whom are in the room - and is now discussing the fact that some companies pay no corporation tax #city2018 Sarah Hendry @singinghen Hottest topic over lunch at the @ WaterUK #city2018 conference? Re- nationalisation? Dividends? Water quality? No, it was #Glugglejugs Katey Pigden @KateyPigden Regulator @Ofwat has to respond to @michaelgove next month. @OfwatChair says if water companies want to help shape what Ofwat says, they have about 10 days to do so @WaterUK @WaterUKEvents #city2018 Tweets from the conference GEARING OF THE NINE LARGEST WATER COMPANIES Source: Ofwat 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Anglian Water Northumbrian Water Southern Water Severn Trent South West Water Thames Water United Utilities Wessex Water Yorkshire Water 79% 68% 78% 61% 62% 83% 61% Ofwat's notional gearing level 65% 75%

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