Excerpts from THE  WATER REPORT 

February 2020 issue 57

FULL STORIES AVAILABLE ONLY IN THE MAGAZINE IN PRINT AND PDF

REPORT Final determinations prove difficult to swallow.

 

REPORT THE WATER REPORT Expert Forum’s verdict on the final determinations. 

 

REPORT Budget to bring water resource decisions.

 

REPORT Water Resources East latest. 

 

INDUSTRY COMMENT Is economic regulation a barrier to achieving social value?

 

NEWS REVIEW Mixed progress on good governance.

 

SPECIAL REPORT: OPPORTUNITIES FROM OPEN DATA

FEATURE Southern combines affordability and sustainability messages.

 

NEWS REVIEW UKRN scorecard.

 

NEWS REVIEW Agriculture and Environment Bills return to Parliament.

 

FEATURE Alternative thinking on alternative supplies.

 

REPORT Urgent messages on climate change for governments, business and investors. 

 
 

Hard to swallow

continued

CONTENTS            full contents of the magazine  

That move will give extra food for thought to the majority of companies, who have not yet publicly stated their intentions following receipt of their final determinations on 16 December.

 

Severn Trent is in a relatively strong position too: fast tracked, with totex spending forecast to be in line with its allowance (Moody’s noted Ofwat disallowed £311m of enhancement but provided base and retail allowances £286m higher than the company requested at £5.7bn, including £150m for Hafren Dyfrdwy); and a £116m revenue boost carried into AMP7 from AMP6 outperformance.

Direction

continued

The Forum, which is run in partnership with researcher Accent and comprises industry leaders and opinion formers, was split roughly into thirds on whether the PR19 package in the round is achievable (yes/no/don’t know). Meanwhile, just over half thought it was financeable. Clearly that’s far from a ringing endorsement.

 

Some had clear reasons for saying ‘no’ on the financeability question, such as: “Ofwat’s own final determinations show that in absence of PAYG adjustments (which rating agencies will see through) the notional companies are not financeable at the BAA1 level Ofwat claims to be targeting.” 

 

NEWS REVIEW Castle seeks protection against weakening wholesaler credit.

 

REPORT MOSL asks CEO Forum for business plan input and budget increase.

 

REPORT MPS and OPS league table updates.

WRE

continued

The WRE plan must:

• Seek to increase resilience for all sectors. 

• Identify opportunities to deliver wider benefits in terms of flood risk and water quality. WRE is particularly concerned to derive public value from the regional strategic schemes it has in sight.

• Ensure that water (either too much or not enough) is not a barrier to economic development in the region. 

• Enhance the environment. “What’s absolutely critical, a clear red line for us, is we must enhance the environment,” Price emphasised. 

• Feed directly into water company Water Resource Management Plans.

That said, Price explained it would be “a bit bonkers” to do a plan for the whole region from scratch, given its size and diversity, so WRE will need to plan using hydrological and political (Local Enterprise Partnership, local government and so on) boundaries within the single plan umbrella. 

 
What’s absolutely critical, a clear red line for us, is we must enhance the environment.”                       Robin Price 
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Flow

continued

Current MOSL data shows Everflow Water has won the most supply points (SPIDs) of all retailers – around 30,000 each of water and sewerage SPIDs, and in fact now serves more supply points than associated retailer SES Business Water. It’s not too far behind Affinity for Business. “In terms of absolute customer numbers, about 50% have switched to us,” Gill says.

 

He adds that if anything, Everflow' rate of growth is going “up and up” – it has doubled the rate of SPIDs it takes on per month to around 1,400 core SPIDs with plans to double growth again.

Almost all its acquisitions are small to medium-sized organisations – the segment given the least attention by the wider market and, by all accounts, the customers who are least-aware of the existence of an option to switch. 

Tough

continued

The RWG operates primarily through subgroups and has produced a number of good practice guides which are hosted on the MOSL website. Bennett stresses the guides are “living documents” with some already repeatedly updated. The group has also produced information to help retailers identify wholesalers offering meter reading services.

Which issues to focus on is decided by trading parties, through a survey and voting. Bennett adds there’s also a bit of a desire for the industry to take ownership of matters flagged as important by market authorities, so it can develop solutions that are practical and workable for trading parties as well as beneficial for customers. The meter reading service guide, for example, came about “because I said we’ll do that” after Ofwat raised a concern about the ease of availability of information.