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UTILITY WEEK | 10TH - 16TH JULY 2015 | 11 Policy & Regulation This week The Environment Agency has released a set of guidelines for water companies to follow in the event of a drought. The agency's drought frame- work for England uses a colour- coding system to determine the severity of a developing drought situation, and sets out the esca- lation process water companies should follow at each stage. The stages are: green WATER Environment Agency sets out drought guidelines (normal), yellow (developing drought), amber (drought), and red (severe drought). During a yellow developing drought stage, the Environment Agency will increase the number of abstraction cessation condi- tions in force for the time of year, as well as encourage volun- tary restrictions on abstraction. At the amber drought stage, the agency will enforce drought permits and orders to protect public water supply and the environment; impose localised spray irrigation restrictions for agriculture: and the agency's CEO will chair special meetings of the National Drought Group. At the red severe drought stage, the government may activate the Cabinet Office Brief- ing Room A (Cobra) to provide additional crisis leadership. Scottish Water facing suit for supply failure Firm faces legal action over contamination that closed nine schools and affected 6,000 properties Scottish Water faces legal action over water contamination in North Lanarkshire last month that resulted in the closure of nine schools and affected thou- sands of homes for one week. The threat of legal action comes from Patrick McGuire, partner at Thompsons Solici- tors, who claims that the water company committed an offence under the Scotland Water Act. McGuire told the Motherwell Times: "The act of parliament that governs the conduct of Scottish Water is quite clear. They have a statutory duty to supply the public with clean and healthy water. "If they do not, as is the case here, then they can be held liable. My team of lawyers, who are very experi- enced in large-scale law suits, are very confident resi- dents have a strong claim for compensation and we're already starting to take calls from worried residents." Scottish Water said the contamination of the water supply on 18 June resulted in the water containing an oily-based substance with a strong odour. The Scottish government has vowed to take "any nec- essary action" following an investigation by the Drinking Water Quality Regulator for Scotland (DWQR). Scottish Water has lied restrictions on usage for the 6,000 properties affected and is currently carrying out an investigation and preparing a report for the DWQR. A spokesman said: "It is essential that we fully understand all possible causes of the issue with the water supply. The investigation is being carried out com- prehensively and thoroughly, before a full and detailed report on all aspects of the incident is submitted to the Drinking Water Quality Regulator." MB ENERGY Ofgem chief: DNOs must work together Distribution network operators must work together to respond to changes in the sector if they wish to be successful in the regulatory process, said Ofgem chief executive Dermot Nolan. Speaking at an Energy Networks Association event last week, Nolan said: "One thing that I really, really don't want to see is a sense that any individual company is only responding to the challenge itself. The chal- lenge is faced by the sector and, in some sense, the entire system. "One company that doesn't work with other companies and doesn't respond to the entire system challenges is not the com- pany that will be rewarded by the regulatory process, it is not a company that will be seen as innovative, and it is not a com- pany that will be successful." Nolan added: "A company needs to be innovative, needs to change, needs to respond and they are the companies that will succeed in the regulatory process. That is my challenge to you." WATER Resilience shortfalls to be highlighted The shortfalls in the water sec- tor's resilience plans are set to be highlighted by the independ- ent resilience taskforce. The group, which was set up by Ofwat in January, has started scrutinising the companies' plans and documents – such as water resource management plans, AMP6 business plans, and climate change adaptation plans – to collate the resilience plans each company currently has. A working group from the taskforce is assessing ten areas such as water resources, sewer- age, HR and IT security, and will rank them red, amber or green. The anonymised data will provide a "detailed picture" of what the companies are doing well and where further work needs to be completed or more detail provided, with a report being produced in the autumn. Chair Jacob Tompkins said: "This will highlight if there is a lack of consistency across the industry or if there are any gaps in the planning." GAS Uncensored shale report is slammed The oil and gas industry has slammed a republished report from the Department for Environ ment, Food and Rural Affairs (Defra) that claims frack- ing could lower house prices, saying it "brings nothing new" to the shale gas debate. Industry body UK Onshore Oil and Gas (UKOOG) said although it was "pleased" that Defra has published the previously heavily redacted report in full, it is merely a "review of existing literature" and is "not analytically robust". "It is in danger of extrapo- lating the experiences of other jurisdictions that have different regulation, planning regimes and geologies," the group said. The unredacted report acknowledged "several positive impacts", including on jobs, energy security and local public services, while impacts on water, noise, landscape and air quality "were said to be low, with impacts on tourism neutral". UKOOG disputed the report's indication that house prices near shale gas sites may fall as a result of "negative perceptions", saying Defra had "admitted" the "evidence… is quite thin and the results are not conclusive". Scottish Water: carrying out an investigation