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| JANUARY 2022 | UTILITY WEEK
Water
Conference report
Digging in for the long term
The fundamental need for longer-term thinking dominated
discussions at the Utility Week 2021 Water Industry Asset
Management Conference in Birmingham. Ruth Williams was there.
A
new regulatory period began in
April 2020 that heralded the start of
AMP7 but no sooner had business
plans gone live than talk turned to what
would come next. For PR24 Ofwat said the
focus will be on longer-term planning and
described each five-year business plan as a
building block within 25-year strategies.
Speaking at the Utility Week's 2021 Water
Industry Asset Management Conference,
senior director at Ofwat Aileen Armstrong
kicked off discussions by underlining the
need to set business plans within longer-
term thinking.
Armstrong said both Wastewater and
Drainage Resource Management Plans, and
Water Resource Management Plans (WDMP
and WRMP) cover only parts of companies'
overall businesses but Ofwat wants to see
long-term strategies that cover the whole of
their operations.
This would, she said, bring far greater
clarity to future price reviews as well as give
confidence to customers and stakeholders
about strategy, investment and how costs are
spread between customers to ensure inter-
generational fairness.
However, the regulator believes a long-
term strategy alone will not be the whole
answer. Armstrong said plans that can be
adapted are essential because none of us
can predict the future, as a global pandemic
brought into sharp focus.
"For PR24 we want adaptive planning to
be at the core of all parts of every company's
business plan," Armstrong said, adding that
planning as such would let companies carry
out long-term strategies even if there were
unexpected challenges – and plan for invest-
ments at the most beneficial point.
"We hear a lot about ageing assets but
age isn't a reliable indicator of asset health,"
Armstrong said, before explaining that the
key thing for Ofwat was to make sure money
is spent wisely and asset health maintained,
Photo:
Southern
Water
