Utility Week

Utility Week 22nd September 2017

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

Issue link: https://fhpublishing.uberflip.com/i/876437

Contents of this Issue


Page 10 of 31

UTILITY WEEK | 22ND - 28TH SEPTEMBER 2017 | 11 Policy & Regulation "If you think education is expensive, try ignorance" Sir James Bevan, chief executive, Environment Agency possibility that a very large body of financial assets that were very highly rated, could turn out to be "completely worthless". Issuing a salient lesson to water com- panies, he warned: "Bad stuff happens. Unexpected bad stuff happens and it's the assumptions you make that kill you." Considering what "bad stuff " might happen to water companies, from a finan- cial perspective, Kingman considered the increased "riskiness" of the equity tied up in highly geared firms, as well as the scope for a political shake-up which, even if it didn't bring renationalisation (as proposed by the Labour party in the recent general election) might bring a "very different" approach to tax and the deductibility of interest. Similarly open speculation about the potential for serious cyber breaches, physi- cal infrastructure attacks and natural dis- asters led to grim observations about the dependencies that water firms place on the continued resilience of other public services and infrastructure systems for disaster recov- ery. It led, too, to consideration of workforce resilience in scenarios where prolonged school closures and failures of payment sys- tems might undermine a utility's ability to rely on its most fundamental resource – its people. With such doom-laden subject matter, the event could easily have le attending chief executives wracked with fears about the "unseen" dangers overlooked in well- thumbed but traditional risk registers. But sector leaders were largely un-cowed. Adopting optimistic pragmatism, a range of chief executives committed themselves to new initiatives, to halt "group think" on risk by adopting cross-sector peer review pro- cesses for resilience strategies, or to address interdependent risks with new operational resilience best practice groups. While they put good intentions into action, let's hope civil strife and environ- mental cataclysm remain at bay. "It is really helpful if regulators can be co-ordinated, so that each is heading towards the same [resilience] objective." Chris Jones, chief executive, Welsh Water "Diversity of opinion in looking at risk is really powerful… why don't we ask people who are not in our industry to look at our risks and see how they see them, because I think they are likely to make us think differently." Heidi Mottram, chief executive, Northumbrian Water "We can't base what we do in the future on what we have done in the past, because we are at such a point of change… so how do we look at what choices we have, choices that we can't set in the context of previous price reviews or previous designs of water sys- tems? How do we get to those choices and, on balance, make the right decisions?" Ian McAulay, chief executive, Southern Water "To unleash boldness [on resilience], I think we've got to be ready to look at longer term regulatory cycles." Liv Garfield, chief executive, Severn Trent "There is a hell of a lot we can still learn from other sec- tors… if you look at the gas industry, they have moved away from avoidance of major shocks to the system, they have moved away from building massive storage capac- ity. The way the gas industry now deal with resilience is primarily through response and recovery." Mel Karam, chief executive, Bristol Water "I strongly believe we need consensus and alignment with our customers around resilience. We need to raise the bar in terms of the level of our engagement." Steve Robertson, chief executive, Thames Water

Articles in this issue

Archives of this issue

view archives of Utility Week - Utility Week 22nd September 2017