Centrica Appoints Iain Conn as Chief Executive
The U.K.’s Centrica announced Iain Conn as its new Chief Executive this week. Conn will take over on January 1, 2015, replacing Sam Laidlaw, who is retiring at the end of this year, and be paid a salary of £925,000.
Conn comes to Centrica from British Petroleum, where he has served as Chief Executive, Downstream, which is BP’s refining and marketing division, for the past 7 years. This is a big role within BP, as the position is responsible for running BP’s customer-facing activities in the fuels, lubricants, and petrochemicals sectors. This involves all parts of those aspects of BP, including shaping the company’s retail services, which has 18,000 service stations in 70 countries, and an estimated customer base of 12,000 per day.
Conn has been a board member at BP since 2004 and has previously held other roles throughout the company.
Chairman of Centrica Rick Haythornthwaite praised Conn, saying his diverse experience will be beneficial to the business. “His breadth of knowledge and commitment to customers and safety make him ideally suited to lead Centrica in the next phase of its development,” he added.
Laidlaw expressed his gratitude in leading Centrica during such an exciting time in energy development.
“My aim has always been to help create a leading integrated energy company capable of meeting those demands while keeping customers and the communities we serve at the heart of what we do,” he said. “Much remains to be done in the rest of the year but I am enormously appreciative of the unstinting work and support of my 37,000 colleagues who all contribute to Centrica's success.”
While Laidlaw is realistic in the amount of work to be done, Conn is up to the challenge. He expressed his excitement, but also signified it was time to really get to work in keeping Centrica a reliable and secure utility.
“Centrica also has a major responsibility for long-term energy supplies, particularly for the UK,” he noted. “I recognize the challenges which we face in rebuilding customer trust in the sector and helping to create an effective and sustainable approach to energy markets. I look forward to playing my part, along with all of Centrica's people, in striving to achieve these goals."
Upon appointment, Iain will also become Chairman of the Executive and Disclosure Committees and a member of the Corporate Responsibility Committee.
Ofwat allows retailers to raise prices from April
Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.
The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.
Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.
In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue.
Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”
There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:
- Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps.
- Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold.
- Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice.
Further consultation on the proposed adjustments to REC price caps can be expected by December.
"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.
"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."
United Utilities picks up pipeline award
A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.
The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.
“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.
Camus Energy secures $16m funding
Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent Ventures, Wave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.
As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.