From the moment Ross announced her departure, speculation was rife among members of the water industry about who might be the next Ofwat chief executive. The Sunday Telegraph ran a story tipping the frontrunners for Ross’s replacement as David Black, a senior director at Ofwat, Hannah Nixon from the Financial Conduct Authority, or Richard Moriarty from the Civil Aviation Authority.
Other potential candidates touted by industry stakeholders included Paul Smith, head of policy at Payment Systems Regulator; Nick Fincham, strategy and regulation director at Thames Water; Tony Ballance, director of strategy and regulation at Severn Trent; and even Alan Sutherland, chief executive of the Water Industry Commission for Scotland.
However, pipping them all to the post is Ofgem senior partner, and Utility Week speaker and columnist, Rachel Fletcher – an advocate of customer trust, and a strong believer in a principles-based approach to regulation.
Part of the rationale behind appointing Fletcher was the fact that she is a straight-talker who takes no prisoners. Longstanding Ofwat chairman Jonson Cox said, when announcing the appointment, that one of the primary reasons for Fletcher’s appointment is her “impressive track record and experience” in regulation of network and customer-focused businesses, as well as her “clear leadership qualities”.
Fletcher has not shied away from a direct approach when speaking to energy suppliers, warning them at the Utility Week Energy Customer conference last January that they were in “last chance saloon”. She insisted they must sort out the switching process to make it “seamless and reliable”, which would encourage customer engagement.
In a column for Utility Week in June, she said Ofgem had started to track the consumer experience more closely and change the way it interacts with suppliers. “Ofgem wants to see energy suppliers put customer needs at the heart of their businesses,” she wrote.
Upon news of her appointment, Jacob Tompkins, chief executive of The Water Retail Company, wrote on LinkedIn that it is “good news for customers and the environment” – two staples in the PR19 methodology. It looks, then, as though Fletcher’s appointment puts the water industry in good stead as it prepares to embark upon the long road to PR19.
We are convinced this principles-based approach – along with a significant step up in our own compliance monitoring and assurance work – is the most effective and sustainable way to achieve the treatment that energy bill payers expect and deserve
Who is Rachel Fletcher?
Before joining Ofgem in 2005 as head of the retail market team, she worked as a consultant advising on energy strategy and policy around the world.
She has an abundance of experience in the regulated utilities space, having led the fifth electricity distribution price control review when she was partner for distribution from 2008. She also introduced the Low Carbon Network Fund – a precursor to the network innovation allowance – whose purpose was to support the distribution network operators in trying out new technology, operating and commercial arrangements.
Fletcher became a senior partner at Ofgem in 2013, and was appointed by the secretary of state to the Ofgem board in 2016.
Until she was poached by Ofwat, Fletcher was responsible for the regulation of the retail energy market, whose role was to: improve supplier conduct; encourage consumer engagement; enable competition and ensure consumers are empowered and protected during the transition to a low-carbon energy system.