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16 | 4TH - 10TH AUGUST 2017 | UTILITY WEEK Policy & Regulation Analysis C athryn Ross took the reins of Ofwat when the regulator was at its lowest ebb. Fresh from the section 13 debacle, relationships with the water companies were in tatters, PR14 was looming and – unbe- known to all – Ofwat had a multi-million pound hole in its budget as it prepared for the price review. Four years later, things look very different. Ross is that rare breed – a regulator who is respected and even liked by the companies she regulates. She takes no prisoners – as some battle-scarred former Ofwat employees could attest – but is widely seen to have been a firm and fair regulator who has achieved significant transformation of both her own organisation and the sector during her tenure. Now, Ross is preparing to leap the fence into the realm of private enterprise, becom- ing head of regulatory affairs at BT, whose combative relationship with its regulator Ofcom is notorious. With just five months to go before she departs, the water sector is reflecting on her achievements – and the task that lies ahead of her successor. The story of Ross's tenure at Ofwat really begins in 2012, some months before she returned to the regulator, where she had pre- viously worked, as chief executive. Her pre- decessor Regina Finn had presided over the section 13 fiasco, which saw it reach a stand- off with companies when it attempted to modify their licences to enable it to set prices differently in future. The section 13 row simmered down when former water company chief executive Jonson Cox was revealed as the new chair- man of the regulator. Unusual in being a "poacher turned gamekeeper", Cox knew the only way to achieve his transformational agenda for the sector was to repair relation- ships with the companies. Soon aerwards, Finn le and Ross was appointed in early 2013. It quickly emerged that Ofwat had a £5.6 million hole in its budget as it prepared for the all-important PR14, and the regulator The legacy of Cathryn Ross With a markedly different focus on company outputs and customer engagement, Ofwat's outgoing chief executive has brought water regulation into the 21st century, industry players tell Utility Week. was forced to ask the companies it regulates for additional funding. Such was the world Ross stepped into. No newcomer to the water sector, she had already served at Ofwat as director of mar- kets and economics, but le for the Office for Rail Regulation in 2012. An experienced regulatory economist – she has also served with the Competition Commission – Ross was back in her element. She knows regulatory theory inside out, but is also a pragmatist and wasted little time in making her mark. Licking the PR14 process swily into shape, Ross implemented a regulatory frame- work that will be remembered in the sector's history books. Its focus on company outputs and on customer engagement was markedly different to past regimes. It has challenged water companies, and brought the regulation of monopoly networks into the 21st century. PR14 was well advanced by the time Ross came into post, and she provided the stabil- ity that was required to see it through. Ellen Bennett, editor, Utility Week; Cathryn Ross, chief executive, Ofwat; Basil Scarsella, chief executive, UKPN; Frank Mitchell, chief executive, SPEN