Category Archives: Utilities

Fresh crisis for Thames Water as investors pull plug on £500m of funding

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Decision raises concerns about financial future of UK’s biggest water firm and increases prospect of nationalisation

Investors at Thames Water have pulled the plug on £500m of emergency funding, raising concerns about the financial future of the country’s largest water company and increasing the prospect of nationalisation.

The beleaguered utilities company announced this morning that its shareholders had refused to provide the first tranche of £750m funding set to secure its short-term cashflow, after the company had failed to meet certain conditions.

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British Gas owner doubles boss’s pay to £8m – despite qualms over previous rise

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Details of Chris O’Shea’s ballooning package emerge in Centrica’s annual report after company reports bumper profits

The boss of the British Gas owner, Centrica, has seen his earnings nearly double to £8.2m, despite having admitted that his smaller pay packet the previous year was “impossible to justify”.

Chris O’Shea earned a basic salary of £903,000, which was topped up by cash and share bonuses worth an extra £7.3m.

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Come clean on secret taxpayer rescue plans for Thames Water, MP demands

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Exclusive: Sarah Olney to press in parliament for details of scheme being drawn up in event of supplier’s collapse

Ministers must come clean on the secret details of an emergency plan for a taxpayer bailout in the event of Thames Water collapsing, a Liberal Democrat MP has said.

Sarah Olney will press in parliament this week for details of a behind-the-scenes rescue operation being drawn up for the biggest privatised water company in England. Olney said keeping the details of the contingency plan secret amounted to a cover-up.

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British Gas launches fixed-rate energy deal offering 12% saving on price cap

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Price Promise tariff gives discount on current cap and guarantees to be at least £1 per fuel under April one

British Gas has launched a fixed-rate gas and electricity deal that offers a 12% saving over most existing price-capped tariffs, adding a new choice to the hard-to-navigate home energy market.

For the past two winters, consumers have largely been spared having to seek out the cheapest deal, because, in almost all cases, it was their supplier’s price cap-protected standard tariff.

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Call for UK utility firms to face higher fines for ‘street scars’ on pavements

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Government adviser says water and telecoms privatisation is to blame for disfiguring streets with concrete slabs

The government must increase fines on utility companies that dig up pavements for roadworks, then pour in concrete rather than fixing the mess, a government adviser has said.

Telecoms and water companies are creating “street scars” in a “wasteful process” that is marring British high streets, Nicholas Boys Smith, who chairs the Office for Place in the Department for Levelling Up, Housing and Communities has said in a report.

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Thames Water’s owners only have themselves to blame for the write-downs | Nils Pratley

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It looks as if USS simply overpaid and underestimated the effort and catch-up investment required

“We continue to view Thames Water as a long-term investment,” said the Universities Superannuation Scheme (USS), the £75bn pension fund for UK academics, as it wrote down the value of its stake in the Thames’ parent by nearly two-thirds, or almost £600m. Top marks for cheerfulness, but it’s a line that recalls the old joke about the definition of a long-term investment: a short-term investment gone wrong.

USS and Canadian pension fund Omers, the other late arrival on Thames’ register in 2017 (they replaced the departing Macquarie and its co-travellers), surely cannot have imagined that the long term would stretch quite so far over the horizon. As USS says, it’s taken no dividends so far, and the current business plan imagines no income for shareholders until 2030 at the earliest. That’s a near-eternity in investment terms for utility assets, which are supposedly prized for their ability to generate steady cash.

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Octopus Energy raises $800m and aims to create 3,000 green jobs in UK

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Extra cash values firm at nearly $8bn, as it says it has greater share of home electricity market than British Gas

Octopus Energy has raised $800m (£630m) from its shareholders in a move that values the company at nearly $8bn, weeks after it became Britain’s biggest power supplier.

Its existing investors, which include Japan’s Tokyo Gas and Al Gore’s Generation Investment Management, have ploughed in extra cash as the value of the utility company surged by 60% since its last fundraising round two years ago.

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Thames Water appoints Chris Weston as boss with up to £2.3m package

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Former British Gas executive tasked with leading turnaround in face of debts and controversy over sewage

Thames Water has appointed a former British Gas executive as its new boss with a pay package of up to £2.3m a year and tasked with leading a crucial turnaround as it faces mounting debts and controversy over dumping sewage in Britain’s waterways.

Chris Weston replaces Sarah Bentley, who resigned with immediate effect in June amid a backlash over the firm’s poor environmental track record. Weston will take up the role on 8 January.

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South East Water paid £2.25m to shareholders despite £18m losses

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Cost of debt rises for firm that left thousands of customers without running water in summer

South East Water, which left thousands of customers without running water this summer, has paid out dividends of £2.25m over six months while overseeing increased losses of £18.1m before tax.

The water company, which serves customers in Kent, Sussex, Berkshire and Surrey, made the payout to shareholders despite facing huge rises in the costs of its £1.4bn debt mountain, its half-year report showed on Thursday. In the six months to 30 September, the cost of serving the debt rose by £7.4m to £54.8m, as inflation and higher interest rates bit.

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Labour vows to ‘rewire Britain’ as pylon plans spark row in Tory party

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Opposition vows to tackle rural connection delays to the grid while Conservatives call for offshore network to preserve landscapes

Labour is promising to “rewire Britain”, making its case to the UK’s rural communities that it will connect farmers and businesses to the National Grid at record-breaking speed.

The pledge comes as Rishi Sunak faces a battle over electricity pylons with the trade secretary, Kemi Badenoch, and former ministers urging him to pull the plug on crucial grid infrastructure.

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World’s largest offshore windfarm project starts powering UK grid

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First of 277 turbines goes into operation at site that will produce enough energy for 6m homes a year

The first turbine to be completed in a project to build the world’s largest offshore windfarm, in the North Sea, has begun powering British homes and businesses.

Developers confirmed on Monday that Dogger Bank, which sits 70 nautical miles off the coast of Yorkshire, started producing power over the weekend as the first of 277 turbines was connected to the electricity grid.

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Pakistan in uproar as protests over soaring energy prices turn violent

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Traders close shops, electricity bills are set alight and utility firm staff are attacked as anger rises over living costs and political strife

Protests against rising electricity and petrol prices have rocked Pakistan over the past week, with thousands taking to city streets and setting their electricity bills alight.

The cost of electricity has doubled in the last three months to about 50 rupees (12p) a kilowatt. Petrol prices have shot up from 262 rupees a litre in June to 305 rupees this month.

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Bare power lines and ‘obsolete’ poles were possible cause of Hawaii fires

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Hawaiian Electric Co wires were seen uncovered as company’s own documents call its wooden poles a ‘serious public hazard’

In the first moments of the Maui fires, when high winds brought down power poles, slapping electrified wires to the dry grass below, there was a reason the flames erupted all at once in long, neat rows – those wires were bare, uninsulated metal that could spark on contact.

Videos and images analyzed by the Associated Press confirmed those wires were among miles of line that Hawaiian Electric Co left naked to the weather and often-thick foliage, despite a recent push by utilities in other wildfire- and hurricane-prone areas to cover up their lines or bury them.

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United Utilities fined £800,000 for taking 22bn litres of water from aquifer

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Company breached three-year rolling limit on abstraction licence at Fylde aquifer in 2018

United Utilities has been fined £800,000 after illegally abstracting 22bn litres of water in Lancashire, causing damage to an important aquifer that will take years to recover.

The illegal removal of water from the Fylde aquifer, which happened during a period of dry weather in 2018, is likely to have negatively affected river flows.

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Southern Water owner Macquarie invests further £550m

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Australian investment bank funds troubled UK utility’s overhaul of pipes and sewage works

The Australian infrastructure investor Macquarie has confirmed it will inject a further £550m into the UK’s Southern Water in an attempt to turn around the troubled company.

The funds are intended to help Southern Water, which supplies Kent, Sussex, Hampshire and the Isle of Wight, to overhaul its leaky pipes and faulty sewage works.

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Scottish windfarm built in 1995 to be ‘repowered’ with new turbines

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ScottishPower expects Hagshaw Hill to produce five times as much energy with half the turbines by early 2025

One of Britain’s oldest onshore windfarms will soon be “repowered” so it can generate five times as much green electricity as it did in 1995 – with almost half as many turbines.

The owner of the Hagshaw Hill windfarm, ScottishPower, began dismantling 26 turbines on its site in rural South Lanarkshire on Wednesday.

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GMB accuses gas network of ‘money-grabbing’ cuts to pension scheme

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Exclusive: Cadent Gas, owned by Australia asset manager Macquarie, is considering closing its defined benefit scheme

The former owner of crisis-hit Thames Water has been accused by union leaders of staging a “cost-cutting money grab” at another critical UK infrastructure asset under its control, as it emerged that Cadent Gas is considering cuts to its pension scheme.

Macquarie, the Australian banking powerhouse that owned Thames for a decade, has led a consortium controlling Cadent since 2016. Cadent, Britain’s biggest gas network, serving 11 million people, was formerly part of National Grid.

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Thames Water shareholder gives backing to crisis-hit firm

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USS support for turnaround plan comes as water company buckles under £14bn debt burden

One of Thames Water’s big shareholders has given its backing to the embattled water company, after the surprise departure of its chief executive and crisis talks with the government over its viability.

Thames Water, which is buckling under a £14bn debt burden and has embarked on an eight-year turnaround plan, is owned by a series of pension funds and other governments’ sovereign wealth funds. The second-biggest shareholder is a UK pension fund for academics, the Universities Superannuation Scheme (USS), which holds about 20% and is the first investor to make public its support for the company.

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Exclusive: UK water giants recruit top staff from regulator Ofwat

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Demands for an end to the ‘revolving door’ as ex-Ofwat directors are hired by key firms

Two-thirds of England’s biggest water companies employ key executives who had previously worked at the watchdog tasked with regulating them, the Observer can reveal.

Cathryn Ross, the new interim joint chief executive of Thames Water and a former head of watchdog Ofwat, is one of several ex-employees working for water companies in senior roles such as strategy, regulation and infrastructure.

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Thames Water could delay accounts as turmoil in water industry grows

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Firm refuses to say when it will publish annual report; pressure builds on regulator Ofwat

Thames Water has refused to say when it will publish its annual report and accounts, which had been expected by investors next week, as concerns mount over the company’s financial viability.

The risk of delay will add to the turmoil engulfing England’s 11 privatised water companies, after a day in which board directors, ministers and regulators scrambled to restore calm as discussions continued over a potential temporary nationalisation of Thames Water.

The Environment Agency (EA) announced it was sending specialist investigators into water companies across England to secure evidence in the biggest criminal investigation into illegal sewage dumping since privatisation.

The experienced City troubleshooter Sir Adrian Montague was parachuted in to take over as chairman of Thames, a role he will take up on 10 July.

The prime minister’s spokesperson said it was for Ofwat “in the first instance” to monitor the financial resilience of water companies, adding to pressure on the regulator.

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