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IN A PANDEMIC

PUBLIC PURPOSE

THE WATER REPORT and Indepen have unveiled their ONLINE 2020 Social Contract Summit that will focus on the next steps for the water sector In demonstrating public purpose in the wake of Covid 19.

November 3, 10 & 24 2020

November 2020 issue

List of contents

This website includes excerpts from the latest edition of THE WATER REPORT.

Full coverage is available only in the print and digital editions of the magazine.

PUBLISHED BY

KEW PLACE

Spending for a ...

WICS has locked in as its SRC21 draft determination a co-created settlement which will see the start of a series of price rises to future proof Scotland’s water.

“Scotland’s water is wonderful. Let’s keep it that way.”

This simple but powerful message occupies the whole of the second page in the concise document published last month by the Water Industry Commission for Scotland (WICS), setting out a draft determination for Scottish Water for 2021-27. It pretty well sums up what the Commission – and all the stakeholders who have collaborated to reach conclusions in the latest Strategic Review of Charges (SRC21) – are trying to achieve.

WICS’ draft determination formally endorses an agreement between Scottish Water and the Customer Forum which will see average price rises of CPI+2% for each of the next six years, about £9 a year more on the average bill. Charges for the period will total £8,032m, funding

rainy day

£4.5bn of investment – 30% up on 2015-21. Moreover, the Commission makes it plain in the document that the trend will continue beyond the SRC21 period.

It says charges will have to increase by a similar amount in real terms (c 9-13%), over the 2027-33 regulatory period to fund a further real term increase of 28% in the overall size

of the capital programme.

Playing for time

Ofwat has blasted the CMA over its PR19 Provisional Findings, and is pressing for the process to go beyond December.

Ofwat has delivered an extensive attack on the legitimacy of the Competition and Markets Authority’s (CMA) Provisional Findings (PFs) in the PR19 appeals of Northumbrian, Yorkshire, Anglian and Bristol Water. And to some extent therefore, on the CMA itself.

No one would have expected Ofwat not to fight its corner hard on important issues where the CMA parted company with its December Final Determinations. Indeed it has done that very thoroughly for most disputed issues.

But it has gone further in delivering an aggressive critique of the authority’s approach as well, citing “fundamental errors” which seem to imply it would have grounds to pursue a judicial review, should satisfactory changes not be made before final decisions are published.

As well as ultimately seeking different outcomes on the contested points, Ofwat has its sights set on the CMA taking more time to reach its conclusions (the administrative timetable currently runs up until 18 March), than currently planned (December final decisions). There is an adage in campaigning that any delay is a victory; if secured, that would be a win for the regulator as it would mean companies can’t implement the CMA’s rulings until April 2022, rather than April 2021 as they hope. It would also allow more time to chip away at the PFs.

Bills: a national lottery?

CCW has launched a review of affordability support in water – with the lack of consistency across the country very much in scope.

CCW has been asked by the UK and Welsh governments to undertake an independent review of the financial support measures available to customers who struggle to pay their water bills. The water watchdog has published a call for evidence, seeking to evaluate the support currently in place and how it might be improved. CCW said: “Over the last decade there has been a significant increase in the scope of measures provided

by water companies in England and Wales to support customers who would otherwise struggle to pay their water and sewerage bills.

"However, not all households are receiving the support they need, and the pandemic is likely to result in increased pressure on existing schemes and available funding.”

Risiing pressure:

too much

uncertainty

in support.

The River Chess has been the staging ground for a different, more collaborative approach to chalk stream revitalisation and the movement is now going national.

Chalk and Chess

At the 2020 Chalk Stream Summit last month, Affinity Water’s director of corporate affairs and communities Jake Rigg described his company’s recent public pledge to end unsustainable abstraction from chalk catchments as “a sea change from us as a company”.

Back in September, on the occasion of World Rivers Day, Affinity voluntarily turned off abstraction in the head of the Chess Valley in the Chilterns.

The company said it will also be significantly reducing groundwater abstraction in the Ver, Mimram, Upper Lea and Misbourne catchments by 2024, confirming its commitment to restore the globally rare chalk streams in its supply area back to health.

It said: “Affinity Water is committing to ending environmentally unsustainable abstraction from these precious river catchments and to work in collaboration with other water companies, industries, universities and NGOs to develop alternative, sustainable water supplies away from chalk river catchments.”

There are only 200 chalk streams known globally, 85% of which are found in southern and eastern England. While some chalk streams, notably the Kennet, Lambourne, Test and Itchen, benefit from formal designations under the EU Habitats Directive, many, such as the Chess in the Chilterns, do not.

The chalk streams crisis is “on our watch now…we’ve got to actually do something”.

Back to basics

Cut the fancy stuff and focus on the basics of better metering and regulation if you want us to save water, major water users told an MEUC/Accent focus group.

If major water users are to be expected to reduce how much water they consume, they will need policy and regulatory motivators and better baseline metering data. In contrast, incentive-based tariffs and alternatives to mains supplies are not attractive to large customers.

These were the headline findings from a focus group run by the Major Energy Users’ Council (MEUC) – representing industrial, commercial and large multi-site energy and water customers – and infrastructure sector market research specialist Accent.

The group was convened following indications that business customers in general and major water users in particular are going to be called upon to reduce consumption to ease the UK's supply/demand squeeze. The Environment Bill will include a legally binding target on water demand which will include

non-household usage.

Saving water: the way forward.

Leading questions

New MOSL leaders, Trisha McAuley at the Panel and Anne Heal at the board joined chief executive, Sarah McMath to provide answers about the water market’s new governance arrangements and their collective ambition.

Last month, THE WATER REPORT was invited to chair a roundtable discussion between newly appointed chair of the MOSL board, Anne Heal, newly appointed Codes Panel chair, Trisha McAuley, and MOSL chief executive Sarah McMath – to look at market governance and the collaboration required to improve outcomes for customers.

Since September, the retail water market has been operating under a refined governance structure with role of the chair of the MOSL board has been separated from the role of chair of the Codes Panel.

So now, the market operator, its board and those who oversee the

market codes are chaired separately, but with a shared objective to make the market work better for customers.

Hence why working together, as well as individually, is going to be crucial says McMath: “No one party can ensure that the market advances and it’s really important that we use the collective expertise that we have within MOSL, but really importantly within the wider sector, that we use that collective experience and knowledge. And the split gives us the opportunity to

look at it from a number of different angles.”

McAuley:

"build trust."

Heal:

"more progress."

McMath:

"different

angles."

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