Standard content for Members only
To continue reading this article, please login to your Utility Week account, Start 14 day trial or Become a member.
If your organisation already has a corporate membership and you haven’t activated it simply follow the register link below. Check here.
And so a warm welcome to Rory Stewart, who was finally confirmed as the water minister last week – four weeks after the election. The sector might chafe at the apparent lack of high-level interest in water this demonstrates, but it arguably sees them better off than their peers in energy. While energy secretary Amber Rudd’s appointment was one of the first made by a triumphant David Cameron, the media demanded instant headlines – and Rudd obliged, moving quickly to enact the Tories’ policies on onshore wind. Stewart, a relative newcomer, has the chance to get to know the sector and its issues before making his move – and here’s the top six issues we think should be on his list:
1. Stewart will want to get quickly up to speed with Bristol Water’s appeal against its PR14 determination, currently in front of the Competition and Markets Authority. As Nigel Hawkins comments on page 20, a favourable CMA intervention on its Wacc, while unlikely, would have far-reaching implications.
2. The water companies have responded to the regulator’s request for a grown-up conversation by coming out and saying just what they think was wrong with PR14 (see analysis, p19). As Ofwat facilitates a “big debate” ahead of its Water 2020 programme, there is an opportunity for the incoming minister to understand both the regulator’s and the companies’ positions.
3. Customer engagement in general, and social tariffs in particular, is one area where the minister’s view will be influential. The new Consumer Council for Water chairman Alan Lovell has some ideas around social tariffs – see interview, p8 – and will also be looking for a view from Stewart on how, and to what extent, customer engagement should form a part of the next price review.
4. Company tax and overseas ownership are almost certain to come back to the top of the agenda. Ofwat caught the political mood early and has been anticipating increased scrutiny of the sector with its moves on transparency and governance. It was interesting to see SSE sign up to the Fair Tax Mark this week – a move water companies may wish to consider.
5. Now the election is over, there’s no excuse not to get started on abstraction and upstream reform. Should competition extend into the wholesale market? Stewart will need to form a view – which could prove crucial.
6. Last, but by no means least, the opening of the water market to competition for non-household customers in 2017 should be high on Stewart’s list. After all, if preparations run late, he would make the call: is it more important to open on time, or to get it right?
Please login or Register to leave a comment.