Regulation research theme

Regulation

Regulation research is primarily driven by the economic regulatory frameworks that the water industry works within, in particular the requirements for water company Business Plans. It also covers the quality regulation frameworks that apply to the water industry, i.e. those that protect environmental and drinking water quality.

This research area covers issues such as customer engagement, metering, assessment of potential changes to regulatory requirements or frameworks, asset deterioration, uncertainty and benchmarking. In particular, a considerable amount of work has been undertaken to produce a Common Framework for Capital Maintenance which has been widely adopted by many companies and their regulators as the process for company business planning and reporting.


Programme Lead(S)

This research theme currently has no programme lead.

 

Sub-categories



 

Projects


 

BQ9 Deep Dive Project Two - How should customers’ and stakeholders’ views be used in regulatory decisions?

Project Status Project Completed


 

Environmental Assessments for Water Resources Planning

Project Status Project Completed

The preparation of strategic water resource plans[1] requires several supporting environmental assessments to be undertaken alongside plan development. A water company must determine if its plan falls within the scope of the Strategic Environmental Assessment (SEA) Directive and/or requires Habitats Regulations Assessment (HRA). The plan must also be able to demonstrate that implemnation of  it would not cause a deterioration in waterbody classification and/or demonstrate that it would not preclude the delivery of measures to facilitate the improvements needed to attain good status, as required under the Water Framework Directive (WFD).  Drought plans also require consideration under the SEA Directive and Habitats Regulations, although WFD assessments are usually undertaken as part of the ‘shelf-copy’ drought permit/order environmental assessments prepared in support of the drought plan in line with regulatory guidance.

 Relevant UKWIR guidance relating to SEA and HRA of WRMPs and drought plans[2] was last updated in 2012. Since then, there have been several developments in regulator guidance and current best practice (including a revision to Environment Agency drought plan guidance anticipated in late 2019), and several important Habitats Directive rulings with implications for strategic water resource plans in particular, including the 2018 ‘People over Wind’ judgment[3]. The requirement to prepare a stand-alone WFD assessment is an additional requirement since the 2012 UKWIR guidance was published.

 There is an increasing move to use an Ecosystem Services (ESS) approach to environmental valuation. An UKWIR project in 2016[4] reviewed the potential benefits of ESS/Natural Capital Accounting (NCA) approaches and made some recommendations for future implementation, but at time of writing these had not been taken forward.

 Clearly with increased focus on development of water trading and regional transfer schemes, it is crucial that environmental assessments of strategic water resource plans for both regional and company level plans adopt the same methodology, baseline environmental data collation and approach to environmental valuation to allow direct comparison of intra- or inter- company or region water resource options. This applies to all aspects of assessment including SEA, HRA, WFD and ESS/NCA. This would require an update to the current UKWIR SEA and HRA guidance, and development of standard methodology for WFD and NCA/ESS assessments for strategic water resource plans. It is essential that the regulators are fully involved in the project steering group to ensure they are signed up to the approaches and guidance developed at a National level[5]. 

 Drought plans are different to strategic water resource plans in that they do not comprise a preferred plan or programme of water resource options, but rather a basket of measures that will be considered for implementation during a future drought event. The measures selected and the programme will depend on other factors including the timing, duration and spatial extent of the dry weather event experienced. The drought plan SEA Environmental Report is therefore a comparative assessment of the environmental effects of implementing each drought option, which should be used to review the potential environmental impacts of implementing supply side or drought permit/order options should they be progressed in the future. However, although a fundamental requirement of the Directive (and demonstrated by the SEA post-adoption statement) there is a need for better integration of SEA into the decision making process for both drought plan implementation and strategic water resource plan preferred programme selection.   


[1] Including Water Resource Management Plans (WRMPs) in England and Wales, Water Resource Plans in Scotland and National Water Resources Plans in Ireland.

[2] UKWIR (2012) Strategic Environmental Assessment and Habitats Regulations Assessment - Guidance for Water Resources Management Plans and Drought Plans. Prepared by Cascade Consulting.

[3] In summary the judgement was that best practice mitigation measures cannot be taken into account when considering screening plans or projects to determine if there is a likely significant effect on a European designated site. This can result in an increased burden of assessment at the ‘Plan’ stage and/or Plans being ruled as non-compliant with the Regulations.

[4] UKWIR (2016) Benefits and Limitations of Integrating Natural Capital Accounting (NCA) and Ecosystems Services Assessment (ESA) into Water Company Activities (2016) Prepared by Cascade Consulting.

[5] Including Environment Agency, NRW, Northern Ireland Environment Agency, Environmental Protection Agency, Natural England, Scottish Natural Heritage, Historic England, Historic Scotland, Cadw and others as appropriate.



 

BQ08 Future Asset Planning: Scenarios Frameworks and Measures

Project Status Project Completed


 

When is ‘surface water removal’ the most cost beneficial solution?

Project Status Project Commenced

Removing surface water from foul or combined sewers offers a number of benefits, both in terms of reducing operational expenditure and flows (and subsequent flooding and spill frequency), as well as offering wider community benefits.

There is an increasing appetite across the water industry to consider and deliver such interventions to help manage a range of drivers, but this appetite is not matched by an in depth understanding of the scenarios and catchment characteristics that make surface water removal options more cost beneficial than traditional engineering solutions.



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