Utility Week

UTILITY WEEK | JANUARY 2022 | 35 Water so companies must ensure they are tracking the best measures of health. With that in mind, Ofwat has coordinated the establishment of an asset management maturity assessment, which sets out plans for long-term asset health. It will be a tool to share best practice and is a way to assess if and what improvements are needed to boost asset management. Developing direct procurement forcustomers Direct Procurement for Customers (DPC) was introduced at PR19 as something the regula- tor is keen to see more of in future reviews. Direct procurement means water compa- nies can competitively tender for third party companies to design, build, test and operate assets. "We're in the early stages of deliver- ing this and looking at how to better sup- port delivery, so we're looking to enhance the long-term view of major projects," Armstrong„said. She explained that asking companies to increase their focus on the long term should provide a pipeline of upcoming investments to potential investors not just for the next ‡ ve-year period but over the next 25 years. This longer-term view of investment needs would provide more time to assess needs, costs and options for investments to aid e‹ - cient procurement. Ofwat is exploring ways to encourage greater engagement with the process and believes bidders will grow increasingly familiar with the DPC process over time, which will be bene‡ cial to future price reviews because processes can be standard- ised through best practice. Real change for real challenges Preparing for the sector's long-term chal- lenges and goals will require a step change in how all participants work, Armstrong said. "Real change will be needed in how companies do things. We can't keep pour- ing concrete to deliver the scale of change needed at an aŽ ordable cost and also meet the sector's net-zero targets." There is a key role for better quality data here, because harnessing it to its full potential will help identify problems with networks or assets earlier. This will reduce the need for more costly interventions later and is something the regulator is pushing for both household and non-domestic water companies. Views from the day Lisa Gahan, regulatory director at South West Water – one of three companies that quali‡ ed for fast-track status at PR19 – spoke "We can't keep pouring concrete to deliver the scale of change needed at an aff ordable cost and also meet the sector's net-zero targets." Aileen Armstrong, senior director, Ofwat Nothing will get into the business plan that hasn't been through one of our planning tools." Lisa Gahan, regulatory director, South West Water "We can't keep pouring concrete to deliver the scale of change needed at an aff ordable cost and also meet the sector's net-zero targets." , senior director, Ofwat Nothing will get into the business plan that hasn't been through one of our planning tools." , regulatory director, South West Water about making investment decisions under conditions of long-term uncertainty. She set out the company's approach, which begins with data and uses a framework of measures relating to customers and the environment against which all decisions are assessed. Gahan explained why the monitoring and measuring framework is important, because it feeds into plans and long-term strategies to ensure the value of outcomes and strategic objectives are considered in every decision. Echoing Armstrong's view on – exibil- ity, Gahan said that in the face of tougher regulations, strengthening public views and mounting costs it takes – exibility to get the balance right for investment. "When we make a decision we measure it and can understand the value in terms of outcomes and strategic objectives," Gahan said. "Nothing will get into the business plan that hasn't been through one of our planning tools." South West's process of continually reviewing and re-adapting lets the company identify and understand the impacts of its actions. A key focus for many in the sector, including South West, is around legitimacy and building trust with customers and stakeholders. Public trust has been at the heart of Bris- tol Water's mission since it was established 175 years ago, a milestone that regulatory director Iain McGuŽ og reminded delegates of. Communication and engagement around all asset decisions is essential, McGuŽ og said, especially when there are decisions to be made about trade-oŽ s. Molly Horsley, senior leader at Scot- tish Water, echoed that sentiment. She said Scottish Water's approach was to take every decision "as if customers are in the room" to make everyone accountable for decisions and the interplay or trade-oŽ s that may be necessary. Another recurring theme was collabora- tion. Lila Thompson, chief executive of sup- ply chain body British Water, praised the level of collaboration that was seen through the pandemic and urged that it continue if sector goals are to be achieved, such as net zero by 2030. She said clarity in companies' individual net-zero plans was essential to make it clear the role the supply chain can play. This is something British Water has been tracking within those plans to understand what is needed and what solutions companies are seeking that suppliers could assist on. Sewer over ows on the agenda No event would be complete without a men- tion of combined sewer over– ows (CSOs) and this was no diŽ erent. Asked about how much of a curve ball the Environment Act and its attention on reducing harm from CSOs would be, Gahan said there was a worry but communicating with customers was key. She said South West's message was that it would make "slow and steady" progress to move away from CSOs but warned that heavy attention on CSOs could be detrimental to other important issues. Thompson reiterated that public atten- tion was unlikely to fade from its "unprec- edented" level of engagement seen in recent months, so managing fats oils and greases would likewise keep rising up the agenda. Ruth Williams, water correspondent

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