Dec 15, 2011

RETURN TO THE GULF

Admin
2 min
  Yesterday's first auction of deep-water blocks since BP's Deepwater Horizon oil spill brought in a total of $337.6 million...

 

Yesterday's first auction of deep-water blocks since BP's Deepwater Horizon oil spill brought in a total of $337.6 million of winning bids to the federal government. Twenty leading oil and gas companies competed for shares of some 21 million acres of federal waters, stretching hundreds of miles of the Texas coast.

Winning the highest number of bids, ConocoPhillips received 75 leases for $157.8 million, according to the Interior Bureau of Ocean Energy Management. BP will also officially recommence its operations in the Gulf, winning 11 out of the 15 bids the company threw an upwards of $110 million at.

BP has made its intentions of reentering deepwater exploration in the area well known over the past few months. Environmentalists feel the company should have been excluded from purchasing leases until last year's spill is fully cleaned up at the very least.

However, former Bureau of Safety and Environmental Enforcement Director Michael Bromwich defends BP's involvement.

“They don’t have a deeply flawed record offshore,” he said of BP. “We’ve done analyses over time on the relative safety records of offshore operators and they were in close to the top crew.”

“The question is, do you administer the administrative death penalty based on one incident?," Bromwich told reporters. “And we've concluded, I’ve concluded, that's not appropriate in these circumstances."

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At the same time the federal government reopens the gulf for business, an independent report by the National Academy of Engineering and the National Research Council was released, revealing the lack of safety precautions the oil industry had taken in the years leading up to the 2010 Gulf of Mexico spill.

"There were numerous warnings to both industry and regulators about potential failures of existing BOP [blowout preventer] systems," the report said. It also called for the redesigning of a massive set of valves, rams and hydraulic devices that were once thought to be fail-safe.

In the wake of a revival of deep offshore oil drilling, safety will be a heated and central topic over the next year. BP says it will take action to increase safety measures in the gulf after the probe of the 2010 disaster. Too soon?

 

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Jul 26, 2021

Ofwat allows retailers to raise prices from April

Ofwat
Utilities
water
prices
Dominic Ellis
3 min
Ofwat confirms levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue

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:   

  1. 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. 
  2. 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. 
  3. 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.

Anita Dougall, CEO and Founding Partner at Sagacity, said Ofwat’s decision comes hot on the heels of Ofgem’s price cap rise in April.

"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 VenturesWave 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.

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