United Utilities resilience approach based on ‘fearful anticipation’

Chief executive Steve Mogford reflects on the water company's resilience lessons from major supply incidents

United Utilities’ approach to devolping resilience is based on reducing a “state of fearful aniticpation”, according to chief executive Steve Mogford.

Speaking at Utility Week’s Congress event in Birmingham, Mogford said that all utilities ought to live in a state of fearful anticipation of service failures and network incidents.

“I would recommend that you live in that state in terms of worrying about what’s going to happen across your network and across your systems,” he said.

“For me, resilience is about reducing that state of fearful anticipation,” added Mogford, going on to reflect on the lessons Unitied Utilities has learnt from high profile supply incidents, including its cryptosporidium outbreak in 2015, and the flooding caused by storm Desmond later in the same year.

“Just this week we have seen the conclusion of legal proceedings into the water quality incident that United Utilities had in Lancashire in 2015,” he said.

“We had about 300,000 homes and businesses, so about 700,000 people who had to boil their water for around a month because of low levels of cryptosporidium, which is a bug that can give you a nasty tummy upset.

“We learnt an enormous amount through that period. My chairman said, you’re going to emerge a stronger company from this. I must admit it was quite hard to believe at the time, but I think the truth is we have.”

The incident cost United Utilities around £25 million, but as “a consequence” the company has invested another £100 million across its estate “in applying the lessons more widely around systems and networks.”

In December 2015, three months after the incident, “two of the worst flooding events in memory in the north west” occurred.

“We saw record rainfall with storm Desmond, which followed a very wet November, so the ground was saturated. And we saw the highest-ever recorded river flows from the rivers Eden and Lune in Cumbria with 1,700 cubic meters per second. It was around 41 Olympic swimming pools per minute coming down those rivers,” Mogford said. 

Disruption was caused to the infrastructure in the region with roads and bridges being taken out, along with damaged being caused to some of United Utilities’ infrastructure.

He added: “We often think about resilience of a site and what would happen if we lost process, or if we had a burst, but Desmond for us meant that we had 71 wastewater treatment works, which were inundated and taken out of action and we had 120 pumping stations that we lost.

“We lost the water treatment works and we had down slipways and catchment land extensively damaged – we had very high levels of muck in our reservoirs which threatened the treatment process.

“It cost us about £20 million to restore all that but I’m pleased to say that based on some of the experience we learned earlier that year, we actually only had 1,000 properties throughout that period, which were temporarily off supply and had bottled water.

“Notwithstanding the loss of so much of our infrastructure only 373 people were on a boil water notice for a short period.”

Mogford told delegates the water sector needs to be thinking of resilience in terms of future issues such as climate change and drought, both of which are set to become more frequent occurances over the next 25 to 50 years.

He explained cooperation with other agencies is key during flooding incidents and companies should not treat customers as a homogenous group, as customers have different issues and problems during those times. He emphasized the importance of keeping customers informed and looking out for priority and vulnerable customers.

Mogford told delegates that when a major incident happens, companies feel guilty and the “temptation is to keep your head down and get on with it and hope people forget.”

But he stressed that, instead, they should actively engage with customers using the multiple communication channels at their disposal.  

“We’ve actually found that trust has improved after incidents simply because of the way we handled it and communicated. That’s an important point to recognise that you can actually increase empathy, you can increase the positive disposition towards an organisation.”

He concluded: “Resilience is about understanding the impact of our operations on customers, to very much improve that through operational control.”

Ofwat has established “resilience in the round” as one of the headline themes for PR19. The regulator has asked companies to set out in their business plans how they will ensure resilience agasint three main strands: operational, finacial and corporate. Business plans are due for submission in September 2018.