Wessex calls for regulatory reform to meet strategic outcomes

Wessex Water has proposed a series of regulatory framework reforms to support a vision for the sector’s future, which includes elimination of spillages from combined sewer overflows.

The company said regulators and government must evolve to keep in step with “complex and urgent societal challenges” they face. While noting the benefits brought by water regulation over three decades, the plan insisted it needed updating.

“Now there are diminishing returns on such interventions; multiple challenges that warrant a holistic approach; and a need to consider impacts beyond the purely financial. Regulation should be an enabler – not a constraint – on ambition. To realise that we need change,” the plan said.

Chief executive Colin Skellett said: “We call on regulators, government, industry and other stakeholders to work together to develop a new regulatory framework based on long term outcomes. This must provide for a price control that incentivises best value, resilient solutions which factor in carbon, biodiversity and wider sustainability alongside price and service.

“It must be a framework that is fit for the future rather than based on the past; that will enable us to nurture natural assets to deliver core services; and to work with others to meet the significant challenges we all face.”

The strategic plan recommends an outcome-based approach to environmental regulation with regulators setting targets at catchment level and enabling companies to choose solutions that deliver the greatest benefits at the lowest cost. This approach, Wessex said, would incentivise innovative approaches for nature-based solutions and catchment markets.

For this, no time can be wasted Skellett said: “We all have to act now, because the climate and nature emergencies can no longer be considered problems for tomorrow. Change is very much with us already, and is demanding a response.”

Wessex identified two changes needed to regulatory frameworks, firstly for the company to collaborate with regulators to agree long term, outcome-based, catchment level targets on water quality, biodiversity and carbon. Secondly, that price controls must incentivise the most effective way of delivering those targets by creating a level playing field for all delivery options.

The strategic direction statement from Wessex will be the “anchor” for its PR24 plans and makes the case for incentives and mechanisms at the next price review to reflect the reform the company said it needs to see to deliver the plan.

It will make it a “particular priority” to completely eliminate discharges from sewage overflows, starting with those that harm the environment and spill most frequently. This commitment goes beyond the requirement stipulated in the Environment Act to achieve a “progressive reduction” in the impacts of overflows.

The eight outcomes that form the statement are:

• Safe and reliable water supply with zero interruptions above three hours and 100% quality compliance.
• An effective sewerage system by halving the impact of sewer flooding
• Zero water poverty by working with CCW and the industry to implement a single social tariff
• Be a top 10 customer service provider in the UK in the Customer Service Index
• Never harm the health of water environment through abstraction
• Great river and coastal water quality by restoring and enhancing water environments – this will including eliminating discharges from storm overflows and pollutions from the network. The company will work with landowners to manage catchments and will champion nature-based solutions
• Net zero carbon with two milestones: the sector-wide 2030 commitment for net zero operational emissions; and net zero embodied carbon from products, materials and services by 2030.
• Increase biodiversity by doubling the organisation’s contribution to the region’s biodiversity, which will be measured annually by the number of biodiversity units created.