Thursday 04 November 1999
The truism that water and electricity do not mix has been borne out by the share prices of the multi-utilities over the past 12 months. While ScottishPower may not be in as bad a shape as, say, Hyder, things are clearly not that good either.
It does not take much reading between the lines of yesterday's interim results statement to see that it is stuck between a rock and a hard place - either a dividend cut or an appeal to the Competition Commission with no guarantee of success.
ScottishPower is juggling with three electricity and one water price reviews which in itself represents a huge drain on management time. Of the four, the one it seems most bruised about is Ian Byatt's proposal that Southern Water slash its prices by pounds 70m next year, most of which will be reflected in lower profits.
The two Ians who run ScottishPower, Robinson and Russell, still think the other Ian will change his mind but the chances of that are slim.
Perversely, the response of ScottishPower shares yesterday was to rise strongly. That, however, had more to do with the market's perception that the Scots' pounds 4bn takeover of the US utility, PacifiCorp, is finally about to happen a year after the deal was first unveiled.
ScottishPower has been warming up the analysts by pointing to the price increases and cost savings it can look forward to in PacifiCorp's West Coast markets once the deal goes through.
But if ScottishPower's experience here teaches us anything, it is that the regulatory vice is only ever turned in one direction. The Scots think they can show the Yanks a thing or two about how to run utilities.
But the US regulators are also taking a lesson or two from their UK counterparts by moving away from profit capping and towards incentive regulation. ScottishPower's regulatory risk can only multiple even further.
- 1 The truth about 'girl things': Three cheers for Heather Watson's honesty
- 2 Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
- 5 Men behaving badly: Urinating while standing, 'manspreading' and the gendering of selfishness
Nigel Farage: NHS might have to be replaced by private health insurance
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
British Muslim school children suffering a backlash of abuse following Paris attacks
George Galloway condemns 'racist, Islamophobic, hypocritical rag' Charlie Hebdo at freedom of speech rally
Islamic history is full of free thinkers - but recent attempts to suppress critical thought are verging on the absurd
iJobs Money & Business
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...
£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...
£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...
£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...