Excerpts from THE WATER REPORT
January 2020 issue 56
FULL STORIES AVAILABLE ONLY IN THE MAGAZINE IN PRINT AND PDF
REPORT PR19 Final Determinations analysis.
REPORT Re-nationalisation risk subsides, but challenges remain.
REPORT Principles for purposeful business and water’s potential to lead.
SOCIAL CONTRACT SUMMIT - Event report
NEWS REVIEW Challenges and choices river consultation.
ANALYSIS Who’s in the frame from the NIC report on regulation?
FEATURE SES Water and the decarbonisation front line.
INDUSTRY COMMENT 2019 was a year of social purpose for Bristol Water.
INDUSTRY COMMENT Anglian Water on the frontline of the public interest revolution.
INDUSTRY COMMENT Can water lend social contract lessons to banking?
FEATURE IBM finds pipe patch up jobs are poor value for money when it comes to beating leaks.
REPORT Big data beats the Beast from the East.
FEATURE Getting more young people into the sector – why and how.
NEWS REVIEW GB beats G8 on satisfaction with water.
NEWS REVIEW Ricardo and Mott MacDonald signed up for zero carbon plan.
INDUSTRY COMMENT Water companies get ahead of the curve on tax transformation.
CONTENTS full contents of the magazine
So the $64,000 question now is, will companies agree with Ofwat that the FD package is both financeable and achievable and therefore acceptable?
Senior director of Water 2020 David Black was very chipper on the morning of 16th. Noting any CMA decision would of course be for companies, he pointed out the industry had in the round been accepting of Ofwat’s PC challenges and crucially, the big differences of opinion between regulator and regulated on totex allowances had narrowed.
Companies had moved down from their original £56bn pitch (to c£53bn by August) and Ofwat had moved up from its £49bn DD number to an FD number of £51bn. “The gap between us now isn’t large,” he said, adding though that “significant issues” remain for some companies.
Chief executive of workforce specialist Energy and Utility Skills, Nick Ellins, said the typically older age profile in the sector needs to change. “Simple science says if you want to run a better business you need to get a better mix of people. It’s financially proven that more diverse workforces outperform others. Every single organisation is serving a diverse community and there needs to be contact points between the sector and the community.”
Trevor Bishop, speaking on behalf of the International Water Association (IWA), echoes these concerns. “The way we’re doing things now simply will fail unless we radically change.” The sector, he adds, has “a long way to go”.
Carly Perry, senior manager of the energy and utilities team at management consultant Sia Partners, focuses on workforce resilience. “It’s critical we encourage a next generation of professionals to tackle the sector’s challenges. But at the moment, we don’t have a pipeline of young people with the skills we need. Utilities need to start asking questions about what skills are needed for the ambitions of the future.”
And even real-time behavioural analysis was there and a riveting exposition from the chief of consultancy Wordnerds, Pete Daykin, that included sentiment detection from language. Daykin posited the provocative statistic: 80% of all actionable data is in the form of unstructured text.
The expectations of an increasingly climate and resource conscious public on leakage reduction have gone through the roof, as manifest in the targets Ofwat has set for AMP7.
At the time of writing, only the draft determination numbers were available. These mandate an average 17% leakage cut by 2025, and for Thames Water where leakage is a particularly prominent problem, a 25% reduction.
Gillett explains care for staff became a priority very soon after she joined in May 2016 and has remained so since. “Off the back of some stuff pre-market opening, I became very aware of the pressures on people… the pressure everywhere to meet the deadline of market opening was intense. I looked at my team and I thought ‘people are going to struggle with this, it's hard’.”
There was a business imperative at play too: “I thought this could all have a very draining effect and actually we have to be on our game for the market and we run the risk in the next six months of draining all of that and finding ourselves a bit depleted.”
Here are some of the problems in market listed by MEUC members – industrial and commercial customers:
• The poor quality of meter read data and estimated reads are a real problem.
• The market feels “unreliable” .
• Customers get a sense of “internal dislocation” within water companies - of departments not talking to each other.
• Customers want to reduce water use, but incentives do not support that.
• Bills are complex and confusing; retailers use all different types of formats which makes life hard for customers with multiple retailers.