Ofwat has flagged up the need to take account in the upcoming 2019 Price Review of the dual risks that some companies may not be adequately considering resilience, whilst others may be proposing a gold plated level of resilience and driving inefficient expenditure.
The warning comesin the Minutes of the Ofwat Board meeting held on 23 February 2017 when the Board considered a paper on the approach to resilience which focused on both Ofwat’s role and the risks/opportunities the water sector is facing.
It noted potential cost pressures in the next review period due to an increased focus on resilience and that the development of water and bioresource markets would also provide opportunities to further resilience.
In the Board’s view the water companies should be able to identify a portfolio of options for addressing supply-demand imbalances including supplies from water companies (water trading), leakage reduction and demand management solutions to develop the most cost effective approach. It was also important that, as part of this exercise, companies with surplus should understand how they can help address issues for other company areas.