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22 | 28TH OCTOBER - 3RD NOVEMBER 2016 | UTILITY WEEK Customers service incentive mechanism (SIM) are in the offing with the onset of competition. This could come in the form of a parallel cus- tomer service metric or a new replacement. Sarah Hendry, director for floods and water at the Department for Environment, Food and Rural Affairs added that the resil- ience of the wastewater sector in the UK was treated as the "ugly sister" of the water sup- ply part of the industry, and that competition could change this perception. For energy, CMA acting chief execu- tive Andrea Coscelli made it clear that the responsibility for introducing the remedies his organisation has suggested lies firmly with Ofgem. However, Ofgem senior part- ner for customers and competition Rachel Fletcher stated that the remedies had to be tested, in particular the suggested introduc- tion of an Ofgem database for sticky custom- ers. She confirmed this remedy would not be introduced if trials were not successful. In a purposeful speech, Fletcher also questioned whether Energy UK was "suffi- ciently resourced and empowered" to meet the needs of the industry in the changing regulatory landscape, suggesting the mem- bers and the industry need to provide it with more support and financing. The future of regulation was also dis- cussed by delegates, with the shi by Ofwat and Ofgem to more principles-based regula- tion largely welcomed. Skellet in particular welcomed the move and said he would like Ofwat to go further. "I love Ofwat," he said, "but I would love it more if it did less." Centrica chief executive for energy sup- plies and services Mark Hodges warned that by adopting a principles-based regulatory stance, Ofgem had to be prepared for and allow greater risks. Doing so, he told dele- gates, would encourage innovation and new ways to better serve customers. Innovation was the key word on the sec- ond day of Congress, with Electricity North West networks strategy and technical ser- vices director Paul Bircham and Anglian Water Services strategic programme and per- formance leader Graham Fulton highlight- ing some of the work their companies are undertaking to create smarter infrastructure and services. They were keen, too, to discuss regulatory methods for incentivising inno- vation – an area in which Ofwat and Ofgem have taken different paths. What was clear from Congress is that change is no longer something in the dis- tance. It is here now, and being embraced by utilities who recognise the old world of com- pliance-focused operations, centred on the regulator and shareholders, is fading fast. Putting customers "at the heart" of utility businesses, both regulated and competitive, is no longer a so phrase for use in PR. It is the keystone for utilities who wish to avoid stranded assets, shrinking market share and irrelevance in a time of technological, regu- latory and social transformation. "At Ofgem we are pleased with how network innovation funding has gone, but we're not delighted." Ofgem senior partner for consumers and competition Rachel Fletcher. Views from the top table: "What could possibly go wrong? Surpris- ingly little. The effort and sheer common focus from the water industry has been incredible." MOSL market engagement direc- tor Tom Notman "I love Ofwat but I would love it more if it did less." Wessex Water chief executive Colin Skellett