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And so we come to the end of another year – and, like those before it, 2017 has been a challenging one for utilities. Energy and water businesses have found themselves subject to political scrutiny, regulatory change and intense, sometimes unwelcome, national media attention.
The festive season is a time for reflection and for putting things right – so, as utility leaders prepare for Christmas, what will they be hoping to find in their stockings? Here are a few ideas:
• By the time you read this, Ofwat will have published its final methodology for PR19, plus the all-important weighted average cost of capital (Wacc). While the industry may be wishing for a few extra points on the Wacc, there will also be a few companies hoping Santa brings exceptional status in the upcoming price review. Severn Trent, anyone?
• Networks, meanwhile, may be hoping to hear a little less about their price regime, RIIO, over the next few weeks. Though only half way through the first RIIO cycle for power networks, the industry is already deep in debate about the shape of the second cycle. And with gas network profits in the spotlight and the prospects of a complete re-opener for DNOs at ED1 mid-point, networks may be feeling less than festive.
• Generators will be hoping for some clarity on the carbon price. While the recent budget indicated the price will continue at its current level until the phase-out of unabated coal – whenever that is – generators of all stripes argue they need longer term certainty. If chancellor Philip Hammond won’t deliver, will Santa Claus?
• Talking of Santa, there’s something very special he could do for energy retailers. With access to every home in the nation in just one night, he has the perfect opportunity to help them with their thorniest problem – the ramp-up to mass rollout of smart meters. If the man in red could have his elves install the meters while he dishes out the presents, that 2020 target would look a lot more achievable.
Of course, some industry leaders have already received the perfect Christmas present – a Utility Week Award. Through all the trials and tribulations of the year just passed, the hard work and dedication of the individuals who work for the UK’s utilities shines through. We again celebrated those achievements at our glittering awards ceremony at London’s Grosvenor House Hotel this week. Congratulations to all the winners, and particularly to the triumphant Utility of the Year, Northumbrian Water, and our Industry Champion, former Eon chief executive Tony Cocker.
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