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It’s a new year – but, for utilities, the same old pressures remain. Indeed, 2018 will see those pressures intensify. With two major regulatory settlements on the cards, a raft of policy changes, an often hostile media, and the ever-present uncertainty of Brexit, executives are gearing up for a tough 12 months ahead. And what should be on their list of new year’s resolutions? Here’s a few ideas:
1. One person crossing their fingers for a good start of the new year will be incoming Ofwat chief executive Rachel Fletcher. Her predecessor, Cathryn Ross, leaves big boots to fill. For Fletcher, the focus in her first 12 months will be on keeping PR19 on track, striking the right balance between affordability and sustainability at a time when the water sector is under unprecedented scrutiny.
2. Water companies will also have their eyes on PR19, no doubt resolving to fulfil their business plan ambitions, whether they’re shooting for “fast track” or perhaps in one or two cases “exceptional” status. Read our analysis of which category each company’s business plan is likely to achieve at utilityweek.co.uk to get an insight into what’s to come.
3. Fletcher’s opposite number at Ofgem (and former boss) Dermot Nolan will have his own challenges. With the regulator’s cuts to embedded benefits under judicial review, and sweeping changes to network charging on the drawing board, 2018 will have its share of fights.
4. Network companies may well be resolving to put across their positive stories in 2018. Unused to the glare of the public spotlight, they faced some withering coverage from the tabloid media as last year drew to a close. They say it’s unfair and fails to reflect the innovation and value they deliver for customers – and they’ll be looking to make this point publicly and repeatedly in the months ahead.
5. With disruption across the utilities market, business of all shapes and sizes will be resolving simply to survive the year ahead. For one energy start up, Brighter World Energy, it is a resolution that was sadly breached in the opening days of the year when it closed its doors. Let’s hope that as cost pressures on small retailers rise, innovation will not be the first sacrifice.
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