Utility Week

UTILITY Week 4th August 2017

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UTILITY WEEK | 4TH - 10TH AUGUST 2017 | 25 Operations & Assets Heidi Mottram Q&A What are your reactions to Ofwat's recently published PR19 dra framework? The four themes Ofwat has come up with are spot on. We're all going to be incredibly focused on good customer service. There is an ongoing message of afford- ability and making sure the industry is good value for money and doing the right things. Resilience is a new duty for Ofwat, but that's not to say that it wasn't there anyway. This is an industry in perpetuity. And finally, innovation. If we are going to do the first three, in an industry that already performs well, then we have to con- tinue to find innovation to take it on to the next level. We all know how the world is mov- ing faster, technology is changing, customer expectations are changing. Anybody that's in any kind of customer-facing business has got to be much more innovative than they used to be. I'm very positive about it, I think it's a great opportunity. How innovative do you think the water industry is, compared with other sectors? I think that's always an interesting debate. Some observers would say we are behind, but then there are plenty of things that you could point to where the industry is really pushing things forward as well. What we're trying to do [at the festival] is demonstrate that there is already a huge amount of innova- tion going on, that was going on before. We have people in our company who will invent things in their garage to improve their working environment and bring them to work. That is a wonderful level of innovation, passion and creativity that you get which you might say is incremental or low-level. What we've learned is that, as a company, we can't possibly have all the ideas on our own. That would be ridiculous. What we wanted to do with the festival was bring as many brains in as we could. There is something about collabo- ration and co-creation with customers – those are where ideas come from, because people are looking at things from a different perspective. And we have to combine that with speed. What can the regulator do to drive innovation in the industry? The regulator made the biggest move on that, and again it was one that we were really supportive of in the last price review – switching from inputs to outcomes. If all that we are measur- ing is the success of what is delivered to the customers or the environment, and it doesn't matter how it's deliv- ered, then people are going to try lots of different methods. That gives us freedom. I don't think it's very easy for regulators, and I don't think it would be successful, to create some direct mechanism to stimulate innovation. What they need to do is create an environment which makes it possible. The [PR19] review that's been published, is going to encourage innovation by allowing people to earn incentives if they have done something that gets a better outcome through inno- vation. That's a really good thing. It's not a direct regula- tory mechanism, but it creates an environment where innovation is celebrated. Utility Week asks Northumbrian Water's chief executive about PR19, innovation, and what the festival aimed to achieve. Case study: sewer flooding Flooding is an ongoing issue that water firms must address if they are to meet long-term resilience and environmental commitments. Sewer flooding can damage properties, disrupt traffic, and cause pollution, all of which can lead to fines or compensation pay-outs. Taken together, it can be a costly problem for water companies. Flooding can be caused by blockages or faulty equipment, or it can be caused by acts of nature such as heavy rainfall or overflow- ing rivers. While some of these causes are unavoidable, being able to identify high-risk areas and better mitigate incidents will minimise their impact. One major difficulty in dealing with sewer flooding is that the cause of the problem is not always near to where the flooding occurs. An IBM-led design sprint sought ways to reduce the frequency and impact of flooding. Attendees looked at how lessons could be learnt from past flooding incidents, how they are handled now, and sought ways in which they could be dealt with more effectively. IBM Global Business Services executive partner in the UK, Darren Bentham, said: "Flooding is a complex issue that has a profound impact on people and communities. It is exactly the type of social and environ- mental challenge IBM loves to tackle. We are excited by working with NWG and the team in our sprint to find pragmatic solutions to both predict and mitigate the impact of flooding." The solution Overall, collaboration was highlighted as being key to identifying flood risks and improving how they are dealt with. Communication was seen as being the main factor in limiting damage. It was sug- gested that an agency could be created to liaise directly with customers and give and receive bespoke information on flooding, helping to reduce flood risk. It was also suggested that members of the public could work closely with relevant agen- cies and help to keep communities informed, to help reduce flood risk and enable people to be better supported when they are affected. "I think it has been easy to become siloed in how we've dealt with flooding. Sewer flooding has previously been seen as [the water companies'] problem, river flooding is something the Environment Agency has been responsible for. There's a lot of mileage in being more collaborative and understanding the whole system," said Northumbrian Water research and development manager Chris Jones, who took part in the sprint.

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