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UTILITY Week 12th June 2015

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10 | 12TH - 18TH JUNE 2015 | UTILITY WEEK Interview reveal a depth of knowledge about the UK water sector, and that Buckland "has been very helpful with some pointers on where I should focus, and that has been much appreciated". Lovell says his priorities for his first few months are to gain a greater understanding of the industry, the impact the price review has had on the water companies, and their ability to deliver on busi- ness plan promises made to customers. He is making it his mission to learn the names and faces in the industry, and what makes it tick – and also to assess the impact PR14 has had from the perspective of an outsider coming into the sector. The CCGs are one area in which Lovell has ambitions. He is "determined" to ensure CCWater has a role in them, but wants to avoid taking on chairmanship. This, he says, will allow consumer voices to be heard and to feed directly into the PR19 business plans. "The issue of CCGs is an area where it would be much better if there was a consistent regime. So one of the things we will certainly be looking to do is encour- age Ofwat to promote a consistent format for the CCGs in which we will be delighted to play our part." Lovell understands that this will not be a straightfor- ward process because the regulator "is understandably reluctant to mandate the companies how to do it", but he is insistent a consistent set-up is needed. Having the same set-up for the CCGs for each of the 18 water companies will, he says, ensure that across the UK, the voices of the water customers are heard fairly and equally as the next round of business plans are drawn up. The other area in which Lovell wants more consist- ency is that of affordability, social tariffs and dealing with bad debt. "We're currently at a third tier of desirability," he says, pointing out that while "it is a start" that most of the water companies have or are introducing social tar- iffs, the variability between them, where some custom- ers may be eligible for support from their water supplier but not their sewerage company, or vice versa, remains a significant issue that needs to be addressed. Lovell says he is pushing for a government-funded and centrally run social tariff scheme, where the £400 million CCWater estimates is required to deal with the affordability problem is provided from taxation, rather than paid for by customers via their bills. "It's a tough problem," he adds, going on to say that under the current system only 10 per cent of the money needed is available because customers are not willing to pay more through their bills. He also concedes that "whether public funding will be made available under current constraints is somewhat dubious". Labour and the Liberal Democrats both set out plans in their general election manifestos to create some sort of national social tariff programme, but with a Conservative majority in Westminster, elected off the back of promises to cut taxes and to cut spending, the chance of a cen- trally funded and run scheme looks remote – at least for now. But it won't stop Lovell making the case and pushing for it. He is not daunted at the size of the task before him and Lovell remains keen to be the champion of fair con- sumer bills and good and improving customer service – something which has been at the heart of what CCWater has done since 2005. But he tells Utility Week that he wants the water watchdog to do more during PR19, something which he calls a "tiny change of direction". "I have a great personal interest in the sustainability and water efficiency agenda – very much from the consumer's standpoint. "I think it may be appropriate in PR19 to take a slightly longer-term view of the steps that the companies should be taking to improve efficiency and reduce leakage and generally be good environmental citizens," he reveals. "If we are taking a longer-term view of what is in the best interest of the consumers, then it is appropriate that water efficiency, sustainability and resilience play a slightly more significant role in our activities than it has to date." It is not only the efficiency and sustainability of water that Lovell wants to have a bigger role in the coming years. He also wants to make CCWater "higher profile" as he starts to reshape the watchdog. With a glint in his eye, Lovell, who relishes a chal- lenge, says: "There is a bit of a suggestion from stake- holders that we should become a bit more authoritative, to get out there and say more what is good for consum- ers, maybe a slightly higher profile. "A slightly higher profile would be a good thing." But a more pressing matter for Lovell, who is making the most of the "relatively calm time aer all the excite- ment of the price review", is market reform and the opening of the non-domestic retail market. He is still confident the market will open on time, but says he will be keeping a close eye on the process, which should result in non-household customers being able to change water supplier from April 2017. But his confi- dence is tempered by a begrudging willingness to step in, if he thinks doing so would save customers from the turmoil of an under-prepared market launch. "One could envisage the circumstance in which we felt there was a potential disadvantage to customers and then we would seek to defer [market opening]. It would surprise me if it came to this but we may have to do that." He adds that Ofwat and Market Operator Services Lim- ited (MOSL), which have recently taken on the responsi- bility for overseeing the market opening programme, still have time to resolve any issues that may arise. This brings Lovell back to where his discussion with Utility Week began, being the new boy and replacing a giant figure within the industry. He acknowledges the good work done by Buckland, thanking her for leaving him to take over from a position of strength. "It is fantastic to take over a good organisation where there certainly are no wholesale changes required – just the odd tweak here and there," he says, referring to the changes he's already outlined. "It's been a very, very successful organisation, which has just achieved a very successful price review for both customers and the industry. "So 95 per cent of what I find, I like and will be con- tent with." Any other plans for CCWater may be developed by the new chair aer the completion of a whistle-stop three months during which he is meeting all the water compa- nies. This is helping to fill any gaps in his knowledge, as well as increasing his understanding of the industry. Ending the interview by taking a sip from his glass of tap water – what else? – he says: "I can't say so far that I've seen or come across anything I wasn't expecting." Smiling, he adds: "But I'm sure I will." "There is a bit of a suggestion from stakeholders that we should become a bit more authoritative"

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