Good interview and interesting piece in today’s Independent with Tony Wray, CEO of Severn Trent.
Sarah Arnott usefully sizes up the water industry conundrum;
Water is a surprisingly complex business. It is the most visceral of the utilities, and has massive capital investment requirements alongside no less than three sets of regulation – economic, environmental and public health.
I was also very taken with Tony Wray’s comment on the existing regulatory framework
At the moment, given the choice between sourcing low-cost water elsewhere or building a new reservoir, you build the reservoir,” Mr Wray says. “That way it goes on your ‘regulated asset base’ and you get to put your prices up and get a regulated rate of return on it. It’s a solution, but it’s not sustainable.
I’m sure there’s lots more scope for thinking like that right across the utilities, especially National Grid.
