(Bloomberg) — United Utilities Group Plc, the U.K.’s
largest publicly traded water company, plans to invest at least
100 million pounds ($156 million) in low-carbon power generation
over five years to cut its electricity bill.
Investing in solar and wind generation as well as
processing waste to produce biogas will allow the Warrington,
England-based utility to supply 35 percent of its electricity
needs, almost double the current level, Chief Executive Officer
Steve Mogford said by phone Thursday.
“We use a lot of electricity so we put a lot of effort
into reducing our power costs,” Mogford said. “We recognize
that what we have got is a lot of sludge produced by the
business, which is ‘black gold’ that can be used in energy
creation.’’
The advanced digestion plant that opened last year at
United Utilities’ Davyhulme facility is a sludge recycling
center that runs on enough human waste to power 25,000 homes. It
handles the sewage of 1.2 million people in Manchester,
exporting surplus power to the U.K. grid using waste formerly
dumped in the Irish Sea to generate renewable power.
Revenue in the year through March, meanwhile, increased 1.9
percent to 1.7 billion pounds, United Utilities reported. Full-year operating profit rose 4.6 percent to 664.3 million pounds
as the company reduced power, labor and chemical costs, the CEO
said.
Flooding, Leaks
The utility, which supplies 7 million people and 200,000
businesses, invested 869 million pounds in its networks last
year, including works to reduce sewer flooding and leaks.
The company plans to invest 3.5 billion pounds through
2020, partly to adapt to weather patterns that will likely
result from climate change. It spent 3.8 billion pounds the
previous five-year period.
“A lot of our works have land around them so we’re also
looking at ground-mounted solar arrays,” the chief executive
said.
Underlying pretax profit climbed 15 percent to 447.4
million pounds for the year through March from 388.1 million
pounds a year earlier, United Utilities reported.
The water company is targeting dividend growth that will at
least match retail price inflation over the next five years
after it proposed increasing its total payout for the past year
by 4.6 percent to 37.7 pence.
The utility, whose shares have risen 18 percent in the last
year, continued its expansion in Scotland and now has more than
200 customers generating annual revenue of about 15 million
pounds, it said.
Severn Trent Plc, the U.K.’s second-biggest publicly traded
water company, reports earnings on Friday.
To contact the reporter on this story:
Louise Downing in London at
ldowning4@bloomberg.net
To contact the editors responsible for this story:
Reed Landberg at
landberg@bloomberg.net
Randall Hackley, Tony Barrett