Utilities companies’ response to floods

Utilities companies’ response to floods

Initial estimates by PricewaterhouseCooper (PwC) put the economic cost of Storm Desmond as £400-500m, with most of the payouts coming from the insurance industry of between £250m and £325m.

UTILITIES COMPANIES’ RESPONSE TO FLOODS

Disruption to utilities compounds the devastating impact of flooding on communities and businesses. How do wastewater, water and electricity companies respond to such events?

When the full force of Storm Desmond hit the northwest, it caused widespread flooding of properties but also disrupted services to businesses that weren’t flooded.

As floodwaters affected electrical substations, wastewater treatment plants and pumping stations in Cumbria and Lancashire, businesses of all kinds were impacted.

Those close to rivers such as local shops, pubs and hotels experienced power cuts, blocked toilets and sewage in their properties. But those further afield such as farmers and the railway were also without power, water services or both, and unable to function.

WHO CLEANS UP?

As the effects of disruption to trading are being counted, how much responsibility for recovery lies with the energy, water and sewerage companies?

Flooding is not the responsibility of any one organisation. Many are now involved in the clean up in the northwest, including the Highways Authority, local authorities, insurance companies, and the police. They will deal with a range of recovery activities from cleaning up individual properties to rebuilding roads and bridges.

The Environment Agency (EA) is responsible for managing flooding from rivers in England and for most flood defences in the UK. But if floods overwhelm sewers, causing them to back up or overflow, then it’s the wastewater companies that have to put it right.

Water and sewerage companies must clear up any spills from public sewers, as well as from pumping stations. They are also obliged to get drinking water back on line, including delivering bowsers to people who have lost their water supply.

Like the water companies, which have a duty to protect critical assets such as pumping stations from floods, the electricity firms must also protect infrastructure like substations.

When extreme weather conditions strike, electricity suppliers will work around the clock to restore vital infrastructure and supplies. They will also supply generators to customers and refuel them as needed.

WHO PAYS?

Initial estimates by PricewaterhouseCooper (PwC) put the economic cost of Storm Desmond as £400-500m, with most of the payouts coming from the insurance industry of between £250m and £325m.

The following day, the government announced that businesses in Cumbria and Lancashire would share a £50m fund to help them start trading again. It also promised to match the first £1m raised by the Cumbria Community Foundation flood appeal.

Floods are not the only natural disasters that have an economic impact on business and communities – worldwide they rank second after storms in terms of economic damage.

However, with several significant flood events happening in the UK in recent years, including one in Cumbria in 2009, flooding and how to protect against it will no doubt lead to further expenditure on insurance and flood defences.

WHAT ABOUT THE FUTURE?

“Given the latest climate change models, we expect the frequency of extreme weather events to increase over time,” said Mohammad Khan, head of general insurance at PwC.

“Small businesses in flood affected areas need to ensure they have either sufficient insurance over in place or capital to cover the impact of a weather event should it occur.”

At the start of 2015, research by the Federation of Small Businesses found that three out of five small businesses had no plan in place to deal with extreme weather conditions, although flooding, drought or snow had negatively impacted two-thirds of small businesses since 2012.

Perhaps now’s the time to put one in place.

Utilitywise

Posted by on Monday, the 14. December at 16.58

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