Five top stories this week
CMA dials down spending hikes for five water firms
Five water companies have been given permission to spend a further £463 million by 2030 after challenging Ofwat’s approach to their business plans. In its final redetermination of PR24 spending plans the CMA has granted 17% of the £2.7 billion additional spend requested by the appellants. This compares to the £565 million (21% of the total ask) provisionally agreed last October. The allowed rate of return increases from Ofwat’s 4.03% to 4.20% but is down from the 4.29% the CMA first estimated.
NESO vows to update constraint cost forecast amid concerns
The National Energy System Operator (NESO) has vowed to update its constraint cost forecast later this year. It comes amid concerns that current outdated forecasts risk generation being built in the "wrong places", eventually increasing consumer bills. The concerns were raised by Mark Williams, EDF’s senior advisor in strategy and policy, who told Utility Week that after significant generation auctions in the last few months, it's now the right time for NESO to update their forecast.
Ofgem CEO Jonathan Brearley quits to join DESNZ
Ofgem’s CEO Jonathan Brearley will step down from his role at the end of March, the regulator has announced. He will take up a new role as a permanent secretary at the Department for Energy Security and Net Zero (DESNZ). During the transition period, Ofgem’s director general for markets Tim Jarvis will serve as acting CEO.
South East Water failed in injunction bid to stall Ofwat announcing fine
South East Water sought an injunction to prevent Ofwat from announcing a £22 million fine relating to repeated supply failures. The water company admitted that it had failed in its attempt to prevent the regulator from announcing the fine, which relates to supply interruptions in Kent and Sussex between 2020 and 2023, and affected more than 286,000 people. A South East spokesperson confirmed that the injunction had been lodged alongside a wider filing for a judicial review of Ofwat’s decision.
Completing smart meter rollout to cost over £1.7 billion
Completing the smart meter rollout by the end of the decade will cost more than £1.7 billion. This is according to the government’s impact assessment, which reveals that these costs will be initially absorbed by suppliers and then passed on to customers. DESNZ’s decision to go ahead with its plan for 100% coverage comes despite pushback from senior industry figures who suggested that aiming for blanket coverage would be a waste of money.
