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Utility Week 27th April 2018

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UTILITY WEEK | 27TH APRIL - 3RD MAY 2018 | 15 This week Yorkshire nearly rid of Cayman subsidiaries Water company says it has acted quickly in wake of criticism from environment secretary Yorkshire Water expects to get final regulatory clearances within days to remove its compa- nies in the Cayman Islands. The company plans to bring the bonds that sat in Cayman subsidiaries back onshore to UK firms early in the summer. It first announced its inten- tion to close its offshore banking arrangements, which it uses to manage high levels of borrowing, in October last year. In November Thames Water followed suit and Anglian Water last month outlined a ra of commit- ments under which it will "speed up" the removal of its Cayman Islands subsidiary. Liz Barber, group director of finance, regulation and markets at Yorkshire Water, told Utility Week: "We said at the time that removing the companies was far from straightforward and would take some time, with a range of legal and regulatory approvals. Nonetheless, we've moved as quickly as we could… We'll be reporting on the final stages of this process when we publish our report and accounts in July." At Water UK's annual City Conference in London last month, environment secretary Michael Gove accused some companies of appearing to be "intent on financial engineering just as much as real engineering". He said Thames, Southern, Anglian and Yorkshire "make particularly keen use of sophisticated financial engineering" having set up "multi-layered corporate structures of dizzying complexity involving multiple subsidiaries, some based offshore." KP ENERGY Scottish Power hikes energy prices by 5.5% Scottish Power has announced a 5.5 per cent increase in its standard variable domestic gas and electricity prices. The energy supplier blamed the hike on rising wholesale energy costs and compulsory non-energy costs, such as deliv- ering low-carbon electricity and upgrading meters. It said these are similar to the cost pressures that led to Ofgem's announcement of a 5.5 per cent increase to the prepayment safe- guard tariff cap in February. The rise will come into effect from 1 June. Customers affected will be hit with an average increase of £63 on a typical annual dual fuel bill. WATER Pollution incident costs firm £420k Severn Trent has been fined £350,000 aer a pollution inci- dent in the River Amber killed tens of thousands of fish. The fine was imposed by Derby Crown Court, sitting in Nottingham, on 19 April. The company was ordered to pay Environment Agency costs of £68,003, as well as a victim surcharge of £120. Proceedings against the com- pany started aer 30,000 fish died and the ecology along 5km of the Amber was damaged. The source of pollution into the river was found to be a release of sodium hydroxide from the Ogston water treatment works, operated by Severn Trent. A spokesperson for the water company said: "We'd like to apologise to the local commu- nity, and fully accept the judge- ment of the court. "Since the spill at Ogston we've strengthened our pro- cedures and have reduced the number of serious pollution incidents by more than half since 2011." ELECTRICITY Rampion reaches capacity milestone All 116 turbines at Rampion offshore windfarm are generat- ing and the development has reached its maximum capacity of 400MW, Eon has confirmed. The project, 13 kilometres off the coast of Sussex, should be fully operational later this year. It will provide enough elec- tricity to supply almost 347,000 homes, the equivalent of about half the homes in Sussex. Matthew Swanwick, project director, said: "We still have a number of activities to complete, for example at the onshore and offshore substations and landfall, so people will continue to still see ongoing activities offshore and onshore over the coming months." Firms were accused of 'financial engineering' Stock watch EDF SHARE PRICE, FIVE DAY Aug 17 Dec 17 Apr 18 EDF SHARE PRICE, FULL YEAR EDF will report an improvement in its financial results in its first quarter update, Jefferies has predicted. Analysts at the investment firm drew attention to the latest quarterly generation figures from France's grid operator RTE, which show nuclear output up 4 per cent year-on-year. They also noted an increase in power prices driven by the rising cost of carbon allowances. As UW went to press, EDF shares were trading at €11.42, but Jefferies says they should be about €13.50. 14 12 10 8 6 12.0 11.8 11.6 11.4 11.2 19 Apr 20 Apr 23 Apr 24 Apr Finance & Investment

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