Excerpts from THE WATER REPORT
November 2020 issue 65
FULL STORIES AVAILABLE ONLY IN THE MAGAZINE IN PRINT AND PDF
CONTENTS full contents of the magazine
INTERVIEW Alan Sutherland on SRC21 and future proofing Scotland’s water.
REPORT Reaction to the CMA Provisional Findings.
REPORT Chalk Streams Summit and River Chess action.
REPORT The gap widens between the industry’s best and worst environmental performers.
REPORT Linking up leakage and innovation.
INDUSTRY COMMENT Innovation curation – PA says it’s really time to act, together.
REPORT Hunkering down for a long haul on Covid.
REPORT CCW’s Affordability Review.
REPORT Will PC21 over NI’s water customers a way out of decline?
INDUSTRY COMMENT Bricks & Water report urges joined up flood and drought development.
REPORT Climate change policy is risker than climate change, says Fitch.
NEWS REVIEW One in 16 SWW customers chooses shares over bill cut.
NEWS REVIEW Sewage monitoring for Covid rolled out.
NEWS REVIEW Rainwater harvesting is cost beneficial.
The Commission describes the water sector in Scotland as “at a crossroads”. Previous investment has been targeted at improving service (ably achieved, given Scottish Water’s rise in the performance ranks compared with English and Welsh water companies since its formation in 2002). Meanwhile, asset lives have been prolonged to lower bills. But now WICS argues service levels are at risk from the ageing asset base and a changing climate, raising the prospect of a backward slide.
So the cost of increasing investment must be balanced against the cost of deteriorating levels of service (and so higher future bills), as well as environmental failings including missing the net zero target.
What customers really don’t want is kicking the can down the road,
putting off a price increase.” Alan Sutherland
The CMA has kept its cards close to its chest; there has been no public response and no hint as to whether it will stick to its guns or yield on any points. The companies, too, seem to have chosen not to rise to the provocation. Their responses generally say the direction of travel signalled by the CMA is correct, and they pick their battles carefully.
One of the four main papers submitted by Ofwat by way of response to the PFs was dedicated to the “fundamental errors of approach” it identified in the CMA Panel’s approach. It said: “The errors are both substantive and procedural. They relate in particular to: (a) the consistency and rationality of its approach; (b) the adequacy of its reasoning; (c) its selective and flawed use of evidence.”
At the end of 2019/20 year almost three quarters of a million households in England and Wales were receiving help through these schemes, with bill reductions totaling approximately £104m. But because social tariffs are funded by customer cross subsidy and need customer buy in, the schemes vary widely in terms of who is eligible for support, the value of the assistance provided, and how many households can be potentially helped each year before customer funding is exhausted.
CCW chief executive, Emma Clancy, made this plain at the launch of the affordability review, citing that the same family could receive 0%, 20% or 90% off their bill, depending on where they live. “Is that right? Is that fair?” she questioned.
The same family could receive 0%, 20% or 90% off their bill, depending on
where they live. “Is that right? Is that fair?”
Turning off the two sources at the head of the Chess will reduce Affinity’s resources by about 8 million litres a day. It will be replaced with abstraction drawn ultimately from the River Thames.
It is a significant move in protecting an environmentally sensitive and contentious chalk stream; Rigg says the top end has been “bone dry” for nine of the last 11 years
The change won’t stop the river drying out in a drought situation, but under normal groundwater levels it will make a major difference and “we are seeing a change already,” he reports.
Nonetheless Rigg fully appreciates the Chesham turn off is “the first step on a long, hard road” towards its commitment to end unsustainable abstraction.
This renewed focus on business customers has been encouraged by better data on their consumption. Recent analysis by MOSL has found that a very small number of customers are using a lot of water:
- non-household customers as a whole account for approximately a third of total consumption in England. Meanwhile 36% of all non household meter points are located in water resource zones with high deficit; and
- 1% of supply points use 61% of all water consumed by non-household users. 20% of supply points use over 90% of all water consumed by non-household users. Moreover, 42% of high consuming non household meter points are located in areas of low water availability.
The role split is clearly just the start of the journey of change for water market governance; there seems to be quite an appetite for reform. At a MOSL level, members voted at the recent Annual General Meeting for six special resolutions to modernise the market operator’s governance, including on voting arrangements, board quorum and directors’ term of office. Recent governance improvements have been made to the Panel too, including appointing a customer representative with voting rights, introducing an "urgent change" mechanism and changing the rules so votes can be passed with a simple majority plus one.
These will go some way to address criticisms levelled at the Panel, including that the customer is underrepresented and that change is slow (an average nine months to get a change through, was cut to 72 hours during the early days of the market’s Covid-19 response).