Utility Week

12 | 18TH - 24TH OCTOBER 2019 | UTILITY WEEK Policy & Regulation This week Call for campaign to cut water usage Ofwat chief says customers use water unwisely because of companies' records on leakage Ofwat chief executive Rachel Fletcher has called for a national education campaign around water usage, on the day the regu- lator published its new strategy. Speaking at Utility Week Congress on 8 October, Fletcher said customers had o•en felt reluctant to engage with water scarcity issues because of a perception that their provider did not have a handle on leakage. She said: "One of the things that stops custom- ers using water wisely and listening to the advice is that they don't believe their provider is doing a particularly good job of using water. They see a leak at the end of their road and they think – what does it matter if I water my rose bush then? There is an absolute necessity for companies to step up their performance." Fletcher added: "I would really like to see a national campaign on water use. I don't think in my whole life that I have thought about my water consumption for more than half an hour. We take water that has been taken from the environment, cleaned to food standard safety – a very energy-intensive process – and we use it to clean our mountain bikes. These things have to stop." On Ofwat's new strategy, Fletcher said: "We are set- ting out three goals. Firstly, to transform the performance of the industry. It's fair to say that water companies are not consistently meeting customers' expectations. "The second plank is ensuring much greater col- laboration across the industry as a whole in ensuring reliable, affordable supplies for future generations while improving the environment. "Finally, recognising water companies have an oppor- tunity to do much more for society and the environment. The goal should be to become public value providers." JW WATER Southern commits to changes as £126m penalty is confirmed Ofwat has confirmed the £126 million in penalties and rebates Southern Water must pay following the water regulator's investigation into the company. Several other commitments have also been agreed by the water company. Southern confirmed on 10 October that employees will no longer receive bonuses and incentive payments for personal objectives linked to wastewater compliance when Southern Water fails to meet its relevant performance commitments. The company has also agreed to make payments to people who were wastewater customers between 2015 and 2020, but are no longer living in the region. Southern has also agreed to provide "greater transparency" on environmental performance, which will see information avail- able on pollution incidents, flow and spill reporting, wastewater treatment works compliance, regional bathing water compli- ance results, emissions and river levels published on its website. Ofwat's "large-scale investi- gation" into the water company found that Southern failed to operate a number of wastewater treatments works properly, including by not making the necessary investment, which led to equipment failures and spills of wastewater. The £126 million payment consists of: £91.2 million for underperformance penalties (money it should have paid as part of Ofwat's price review incentive regime); £31.7 million (in lieu of a greater fine) in additional compensation to customers for failing in its legal obligations; and a £3 million fine in recognition of the serious and significant breaches of its licence conditions and statutory duties. ELECTRICITY Elexon calls for nationwide flexibility exchanges Code administrator Elexon is proposing that nationwide elec- tricity flexibility platforms are set up so that local distribution network operators (DNOs), sup- pliers and businesses can buy storage output or demand-side response (DSR) services. In its latest policy view, pub- lished on 11 October, Elexon sets out how it believes the platforms can provide more open, trans- parent and competitive ways to trade DSR services. Under the current arrange- ments, aggregators, DSR providers and storage operators have no choice but to sell their services to the established DNOs. The proposed platforms would provide a route for trading spare capacity on DNO networks. Elexon said this could help to speed up connections for renewable generators, or other users, by giving them options to buy capacity and get a grid connection more quickly. Firms 'thought not to have a handle on leakage' Political Agenda David Blackman "Queen's Speech is treading water on the environment" This week's Queen's Speech marked the first point when the government could start backing up its environmental rhetoric with legislation. However the speech con- tained no concrete new steps on emissions reduction. The biggest news for utilities was the resuscitation of the envi- ronment bill, which will oversee environmental law post-Brexit. There was no mention of the est progress report on the UK's emissions reduction plan. This included new plans to boost the minimum energy efficiency of rented commercial buildings to the EPC band B standard by 2030 and making it simpler to secure planning permission for large-scale battery plants. These are welcome steps, but they stop short of the systemic changes that were being called for on the same day at Energy UK's annual conference. Energy White Paper, which was originally due to have been out in the summer. How much the lack of pro- gress matters is open to debate. Few believe this Queen's Speech is more than a wishlist inscribed on vellum, given that the govern- ment is currently several dozen seats short of a parliamentary majority. The following day saw BEIS publish its response to the Com- mittee on Climate Change's lat-

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