Utility Week

10 | 1ST - 7TH JUNE 2018 | UTILITY WEEK Policy & Regulation Market view O fwat is currently in the midst of con- ducting its next price review, PR19, which will set the prices that water companies charge customers for the five years from 2020. The deadline for dra busi- ness plan submissions is early September, with each of the 19 incumbent water compa- nies in England and Wales having to submit detailed planning documents for the forth- coming five-year period, documenting price, asset and bid assessments, together with a complete financial model. This five-yearly review process entails collating and analysing data, from customer experience to asset resilience and perfor- mance, from each provider and delivering assessments. It is a huge undertaking and costs tens of millions of pounds to the tax- payer – contracting PwC as "delivery part- ner" for PR14, the last review programme, cost more than £6 million. A major contribu- tor to the large expense is a varying level of technical maturity and absence of data regu- lations across water companies, particularly in terms of how data is collated, recorded and analysed. Water bills have increased by 40 per cent over the past 30 years and there is growing unrest among consumers about the service they receive. Establishing a more efficient method of converging all the information water utilities need to provide to Ofwat could significantly reduce these sums, with poten- tial benefits for consumers and infrastruc- ture investment. Tackling a lack of consistency The key to this is linking datasets so com- panies could conceivably create a compre- hensive, digital, round-the-clock overview of how their assets are performing and the information needed for measuring performance against targets, such as cus- tomer experience, asset health and overall resilience. But the industry is holding itself back. There is a low level of understanding about how data can and should be used, exacer- bated by the advent of new technology. There also tends to be little organisation around who is directly responsible for not only cre- ating the data, but moreover managing the information, which oen leads to significant inconsistencies in how data is analysed and managed across each provider. The upshot is that the UK water indus- try lacks a universal format or "language" for classifying data within individual asset portfolios and across the sector. Without this consistency, reconfiguring the information manually is a highly time-consuming and expensive job, for both Ofwat and the water companies. A uniform approach The industry needs a culture change in how data is considered. If it is regarded as an asset in its own right, we are much more likely to realise the benefits offered by digital analytics. Together with a consistent approach to how data is recorded, analysed and managed, there needs to be a commit- ment to treating the information in line with the same regulations and respect that physi- cal infrastructure assets are given. And this is without further delving into the security of data and digital assets. There are already clear, established guidelines for how data should be han- dled for assets in the BS1192 principles. But these only represent best practice recom- mendations and are not mandatory. What's required is a commitment across the sec- tor to adhere to these rules if we are to see a more rigorous and consistent approach to managing information. The application of these standards, in unison with disruptive technologies, will unlock the next age for digital enterpris- ing. This is way beyond the colloquial and product-based solutions we are inundated with in the marketplace, with far more ele- gant and universal platforming solutions set for the near future. An anticipated example in AMP7 should be the compression of costly design and build activities in the lifecycle of assets. This will deliver less emphasis on capex, and influence direct delivery models to incorpo- rate more digital asset management (Dam) within their core, as well the opportunities for greater collaboration and the bonding of operational data. Treating data as an asset class goes hand in hand with building a stronger digital cul- ture. The skills needed to deliver a compre- hensive Dam programme are in short supply and businesses need to focus on nurtur- ing their employees to fully understand the value of data and how to collate, analyse and manage it. This means developing train- ing schemes that can build these skills from the ground up, to create a new generation of data scientists who can implement and man- age infrastructure that allows information to be collated from individual assets and flow into a single capability, either within a water company or regulator. While data management is not the only reason behind the high costs involved with the five-yearly pricing review process, the potential for efficiency savings evidences the vital role that Dam could play. Data demands will only increase, and by driving digital cul- tures and ensuring a commitment to consist- ency across the sector, Ofwat would have the option of using the savings to improve ser- vices and reduce water prices for the public. Neil Walker, technical director, Sweco UK Big wins in data management Neil Walker says a commitment to recording and collating data in consistent formats and strengthening digital cultures could help Ofwat get more for less in future price reviews. Key points Ofwat's price reviews are driven by huge amounts of data from companies. Differences in the way data is collated and presented make the process of processing it much more expensive than it need be. Water companies need to develop a com- mon "language" for classifying assets. A culture change is needed across the sector in how data is regarded. Best practice guidelines on handling data are already established and their wide- spread, consistent adoption would yield dividends.

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