Utility Week

UTILITY WEEK | 23RD - 29TH MARCH 2018 | 21 This week Anglian to up clarity and cut dividends Financial and corporate initiatives aim to improve transparency, trust and customer confidence Anglian Water is embarking on a transparency overhaul with a ra of commitments announced last week, which will see it "speed up" the removal of its Cayman Islands subsidiary, reduce divi- dends, increase investment and review its corporate structure. The company hopes its "series of financial and corporate initiatives" will improve transparency, trust and customer confidence. The programme has been developed in response to challenges laid down by Ofwat's chairman, Jonson Cox, and environment secretary Michael Gove earlier this month at the annual Water UK City Conference. In a bid to improve "transparency and clarity" of its financial structures, Anglian said it would "significantly speed up" the removal of its Cayman Islands subsidiary. It plans to repay an inter-company loan to "simplify" the presentation of its accounts, particularly around real dividends, and aims to complete this by the end of this financial year. The company said its Cayman Islands subsidiary "is and always has been" registered in the UK for tax and it has never received any "tax advantage" from this loca- tion, nor has it been used to raise debt finances. "The subsidiary is effectively dormant," it said. Anglian has also pledged to reduce dividends through to 2025, which it said would result in a "significant reduction" in the company's level of debt and gearing. By reducing dividends to shareholders, it will invest an extra £65 million in resilience schemes not included in its origi- nal business plan for the current regulatory period. KP ENERGY 'Add renewables to auction to cut bills' Allowing subsidy-free renew- ables to bid for capacity con- tracts would cut energy bills by £600 million between 2025 and 2035, a new report has found. The analysis by Aurora Energy Research considered the proposals in the recent cost of energy review for an "equivalent firm power" auction. The independent review – commissioned by the govern- ment and authored by Oxford economics professor and Aurora director Dieter Helm – called for a capacity auction in which all technologies, renewables included, could bid for contracts on the basis of their contribution to security of supply. If existing subsidised renewa- bles were allowed to enter, the cost to consumers would rise by £400 million between 2025 and 2035, with no gain in security of supply. By contrast, allowing only new unsubsidised renewables to enter would lower costs by £600 million over the same period. ENERGY Bank's green goals 'not safeguarded' Parliament's public spending watchdog has cast doubt on whether the privatised Green Investment Bank (GIB) will continue to support the govern- ment's clean energy policy goals. The report into the GIB's £1.6 billion sale to investment bank Macquarie in 2017, issued on 14 March by the House of Commons Public Accounts Com- mittee (PAC), raises concerns that the bank's founding green goals were not sufficiently safe- guarded by the government. Macquarie agreed to retain the five green purposes of the GIB, which has been renamed the bank's Green Investment Group (GIG). However, the PAC says the powers of the board of trustees, set up by the Depart- ment for Business, Energy and Industrial Strategy to vet the GIG's adherence to its green purposes, do not extend to the approval of investment decisions. WATER £2.3m investment to reduce flood risk Northumbrian Water plans to reduce the flooding risk in a Cleveland village with a £2.3 mil- lion programme of works. The company will consult with residents of Great Ayton in North Yorkshire to discuss improvements to the village sewer system and explore sus- tainable drainage solutions. Engineers have identified an opportunity to reduce the risk of flooding in Roseberry Crescent and are developing proposals for the installation of 1,300m of sur- face water and foul water sewer. Building bridges: aim to improve customer trust Stock watch 9.5 9.0 8.5 8.0 EON SHARE PRICE, FIVE DAY 20 Feb 27 Feb 6 Mar 13 Mar 20 Mar EON SHARE PRICE, FULL YEAR Eon shares have lost around half of the value they gained following the announcement of a huge asset-swapping deal with fellow German energy giant RWE earlier in March. At the time of going to press on Tuesday, the stock price had fallen by around 5 per cent over the previous week to €8.85 per share. Ahead of the announcement they were trading at €8.45. The share price initially rose to €9.25 in the wake of the announcement. 9.3 9.2 9.1 9.0 8.9 8.8 14 Mar 16 Mar 19 Mar 20 Mar Finance & Investment 15 Mar euros euros

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