Editor's letter: Cadent's to do list
Ellen Bennett eyes up the top priorities for Cadent as it sheds the livery of National Grid Gas Distribution.
Congratulations to the network formerly known as National Grid Gas Distribution (NGGD) on its shiny new name and brand, Cadent, revealed to Utility Week this week by chief executive Chris Train. It’s been an extended and very public sale process, and it will no doubt be a relief to the team to have a new name, a clear direction, and dare we say it, some freedom from the behemoth that is National Grid. Cadent, as we must get used to calling it, remains the biggest gas distribution network and the challenges ahead of Train and his team are many and varied. Here are our top five:
1. First up must be improving customer service and satisfaction. Often seen as a laggard on performance, NGGD was the only gas network to fail to meet RIIO targets for customer service in 2015/16. It paid a regulatory penalty at the time, but the biggest damage was to its reputation and repairing that, as well as the customer relationships that underlie it, will be the team’s top priority.
2. High on Train’s list will be keeping his new investors happy. The consortium behind Quad Gas Group paid top dollar for Cadent, putting a value on the business of a whopping £13.8 billion, and they’ll be expecting returns. Lead investor Macquarie is known to be an aggressive owner – and meanwhile, the board will have to manage the potentially tricky situation of having National Grid remain as a minority stakeholder and a so-called “silent” partner. Oh, to be a fly on the wall in those board meetings…
3. Talking of National Grid, the new company will have a strong legacy from its former owner. While there are many positives to that – its ability to keep the single emergency number on track, for example – it also has drawbacks. The Cadent top team will be looking to enact a culture change, and quickly – all the more tricky given they too hail from the alma mater.
4. Ofgem will be watching closely, and relations with the regulator are near the top of the list. With the first cycle of RIIO now more than halfway through, conversations for the next round are set to begin in earnest. Cadent will be looking for a regulatory regime that assures its future in the new energy mix and funds investment in infrastructure as well as keeping prices down for consumers.
5. Train has been a leading figure in the conversations around the future of gas. The concerted effort by the gas networks to identify an ongoing role for their businesses – whether by converting to hydrogen, transporting shale gas, or injecting green gas into the grid – has paid dividends. Policymakers have bought into gas’s future and Train and his team will be looking to help shape it.