Resilience is the Cabinet Office approved idea that all the regulators, including Ofwat, are having to come to terms with. The original Cabinet Office definitions looked rather like versions of sustainability repackaged http://cmscoms.com/?p=1684 . On a more pragmatic note the challenges of major events like the floods of 2007 and storms and floods of 2014 are belatedly prompting a wide range of practical measures both within and between sectors. The two reports below reflect this pragmatism.
UK Regulators Network publishes report on cross sectoral issues
The UK Regulators Network (UKRN) comprised of many regulators including Ofwat is also busily working on the challenges resilience poses. They published a report setting out the results of the first phase of the Cross-sector Resilience project and our plans for further work in phase two. The project is focussed on finding ways for the regulators to tackle challenges to the resilience of UK’s national infrastructure which have cross-sector implications. The organisations comprising UKRN together provide regulatory oversight of the companies which own and operate much of the UK’s national infrastructure. This infrastructure and the products and services it delivers are important, and sometimes vital, for the normal functioning of our day-to-day lives. The resilience of these infrastructures against a wide range of threats is therefore an important topic for regulators, Government, and consumers. Click here to read more
Resilience Task Force – Ofwat – Definition
Utility week: Resilience Task Force: Although the Water Act set out a clear duty for Water Companies to be resilient there was one significant problem. Resilience meant different things to different people and companies, as admitted by Ofwat director of parliamentary and public affairs Nicci Russell in December last year. So getting the sector to work together to hit a solid goal would have been impossible – as that goal would have been a shape-shifting target. This is all set to change as the resilience taskforce has answered the first of its three major questions – defining resilience.
Its other two – highlighting what suppliers need to consider as they think about providing resilience, and what Ofwat needs to consider in relation to resilience – will be answered as the year progresses.
The group has come up with the working definition: “Resilience is the ability to cope with, and recover from, disruption, trends and variability in order to maintain services for people and protect the natural environment.” The phrase “no and in the future” is likely to be added to this. This definition, and the work packages set out by the taskforce, is an important first step.
The definition, the ways of building resilience, and the ways of measuring resilience the taskforce isset to come up with, will help to form the PR19 price review, and the ways water companies can make – and lose – money. Without a set and accepted definition, resilience will remain a vague concept without any way of monitoring and rewarding progress, or penalising for a lack of it. That is why the taskforce, chaired by Waterwise managing director Jacob Tompkins, was created by the regulator at the start of this year. To inform, to lead, and to initiate the debate. The definition is the result of the first two meetings held by the taskforce. Albion Water chair Jerry Bryan said that whilst it is still early days, the taskforce has “made good progress” in setting the definition, and CIWEM head of policy and communications Alastair Chisholm told Utility Week, it is “robust and builds on the content in the [Water] Act”. Chisholm added that innovation within the industry will be vital to building resilience, and that industry best practice has to be shared and built upon.
The taskforce is in the midst of searching out what the best practices are within the sector, with the second of its work programmes seeing it working with students from Cambridge, Oxford and the London School of Economics to review the current structures in the UK.
Once these have been collated, it will help to shape the next two work packages of the taskforce, creating a matrix setting out how the sector interacts with others, and putting together a list of questions to put to stakeholders surrounding resilience.
This part of the process is, according to Andrew Bainbridge, chair of the Major Energy Users’ Council, crucial – which has a policy group that looks at water. “Listen to the people with experience who know what has gone wrong and understand what needs to go right,” he said. “Encourage feedback.” That feedback will come – but only once the consultations have gone out. They are expected to in the coming weeks, starting the much needed process of engaging with the industry on what can be done to boost resilience and how it can be measured.
Once this has been collected a formal report needs to be created and passed onto Ofwat, which will then use the findings to help shape its PR19 framework, and to be a central plank in its Water 2020 strategy. This will dovetail with the shift away from capex and opex to a totex regime, which was introduced for the PR14 price review period. Tompkins sees this as an important foundation to the resilience agenda. “Resilience isn’t about removing big infrastructure and moving towards service based models, it is about both,” he told Utility Week.
Key to this approach will be the freedom, like that afforded by Ofwat to the companies for AMP6 with its outcomes based approach, to deal with the resilience in the way each company sees as most appropriate for its own region.
Holly Yates from the Department for Environment, Food, and Rural Affairs’ water reform team agreed that the water companies must have that freedom, stating: “Resilience is not an answer, it is not a tick in a box, it is a spectrum.”
But before any work to meet resilience targets can be started by the companies, or for those targets to be set by Ofwat, the taskforce will have to complete its work programmes and submit a final report and recommendations to the regulator, expected in the autumn.
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