Utility Week

UTILITY WEEK | 27TH MARCH - 2ND APRIL 2020 | 13 Policy & Regulation The new world order: what comes next? Shortly aer the 50-day milestone for coro- navirus in the UK, prime minister Boris Johnson announced measures to stop any- one in the UK from leaving their household, except for one form of exercise a day, collec- tion of essential supplies and travel to work – where absolutely necessary. These measures will be difficult to bear for the many now largely trapped in their homes for at least three weeks and quite probably longer. But they are also difficult to process for the key workers who must continue venturing out to maintain critical national infrastructure and essential ser- vices – including utility workers. In the immediate future, there is there- fore a heavy burden of responsibility on utility company leadership to look to their staff welfare. Companies must be aware of stress and strain on their workers and take whatever steps they can to provide support, guidance and recognition to individuals on the front line. They cannot afford to lose more manpower than the virus itself is sure to cause. Then too, measures for the enforced iso- lation of households will inevitably exacer- bate many customer vulnerability scenarios. Offering payment holidays to those expe- riencing financial stress as a result of the outbreak is not enough. If ever there was a need for utility companies – and relevant third parties – to collaborate and find ways to share the great wealth of information they have individually acquired over time about customer vulnerabilities, it is now. And action to resolve circumstances that may be putting the health or safety of customers at risk should be swi and decisive. But even as senior teams across the indus- try consider the best strategies for stepping up to these responsibilities and empowering employees to make helpful interventions, questions are being asked about what the world will look like once we have "turned the tide" of Covid-19, as the prime minster has said he is confident we will do. To try to answer this today would be foolhardy. The UK's first 50 days with the virus may feel like a lifetime in terms of the significant changes seen in our working and personal lives, but there is still a long story of radical government action and industry impact to play out in this crisis. What is certain though, is that many in the utilities industry already harbour worries about the impact that this all-con- suming distraction will have on the UK's progress towards its net zero emissions commitment and the availability of capi- tal to invest in a monumental overhaul of national infrastructure. And, on a more positive note, that coro- navirus will leave the utilities sector a far more flexible and technologically confident industry than it was before as all organisa- tions are forced to designate greater auton- omy to employees and maximise the value of tools for flexible working and remote or automated control of assets. As the industry embarks on the next 50 days of coronavirus war-footing, there is no doubt that many more far-reaching conse- quences of the outbreak will emerge. Further coverage of the short and long- term impacts of coronavirus on UK utili- ties will be available daily on Utility Week's website. own organisation are from customers requesting delayed bill payments because of temporary or permanent loss of income. At a rough estimate, on 18 March they believed that 5 per cent of incoming contacts already fell into this category. It is an ominous indicator of the numbers likely to be seen in the coming weeks and months as the nation's economy is necessarily suppressed in the interests of overcoming the spread of disease. With many energy retailers already operating at a loss even in normal market conditions, moving with agility to upgrade organisational IT to support distributed contact centre operations will be a tall order. Acting swily to institute split-workforce routines – for example whereby half the workforce works from home and half from the office on a rotating weekly basis – is an alternative measure that can keep operations ticking over. Indeed, early anecdotal evidence from more than one company suggests that productivity and performance could actually increase under such working patterns. With or without the help of technology and flex- ible working patterns, however, there are many market experts who expect coronavirus to trigger a fresh bout of supplier failures in an already fragile marketplace. A worry for some commentators is that such a scenario could cause the supplier of last resort (SOLR) mechanism – which has served consumers well in the past couple of years – to falter, primarily because, with companies straining to maintain service levels for their existing cus- tomers, it could be harder than usual to find suppliers willing to put up their hands to take on new customers. As a senior industry source explained, the SOLR pro- cess can represent a major strain on human and finan- cial resources, a risk that companies could be reluctant to take in the current climate. Suppliers would also be cognisant of the fact that customers coming on board during this especially worrisome time would expect rapid responses to queries and concerns. "Usually in a SOLR scenario you can say 'hang tight, we'll get everything straight for you within a few weeks'. In this context, customers would be wanting you to rec- oncile everything for them within the day," they said. Of course, it's not only domestic customers – or their utility providers – who are worried about the immediate and longer-term impacts that measures to contain the spread of coronavirus will have. The B2B energy supply market, usually significantly more robust than its B2C counterpart, is heading into undeniably rough waters. Despite government assur- ances of support for businesses effected by its measures, companies are already going to the wall. Meanwhile, many of those bidding to survive are scal- ing down operations. The inevitable upshot is that B2B energy retailers – and indeed players in the non-domes- tic water market where margins are wafer thin – will end up "screwed on bad debt and screwed on demand vol- umes", as one senior industry figure put it. With a minimum of 12 weeks of economic lockdown stretching ahead, many utilities are in an excruciatingly uncomfortable time of limbo. Jane Gray, content director, Utility Week

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