Delivering safe and secure water and sewerage services relies on there being enough treatment capacity to satisfy consumer demand. It also relies on the assets such as pipes and treatment works being maintained to a level that ensures services are not affected during normal, planned operating conditions.

But planning for everyday operating conditions is not the only thing about which the water companies in England and Wales have to be concerned. Extreme events caused by hazards that are beyond their control – such as flooding, drought or even acts of terrorism – can also disrupt services to consumers. The companies we regulate have to manage this risk by giving consumers an appropriate level of protection. We call this ‘resilience’.

Evaluating hazards and risks 

Water companies have always considered resilience, and the need to balance the cost of making assets more resilient with the risk of extreme events. Making sure that water and sewerage services continue to operate normally, whatever the event, would be very expensive. Companies need to build in a level of resilience that their customers are willing to pay for. 

As part of the 2009 price setting process, we published an analytical framework to help the companies make better investment proposals for improving resilience. It helped them to identify and propose solutions to the most pressing resilience risks. The analytical framework has a specific focus on evaluating flood hazards, but it builds on previous work by UKWIR on more general risk planning for the water and sewerage sectors.

Future approaches to resilience 

There are a number of hazards to water and sewerage services that are outside the control of companies. Some of the most visible are weather-related, such as drought and floods. The likelihood of extreme weather events is likely change with a changing climate. This means that companies will need to improve the resilience of their assets.

We are currently developing our future approach to resilience. In particular we are looking at ways to encourage the sectors to become more resilient. We also want to improve understanding of the level of service that customers want, expect and are prepared to pay for – even under extreme events.

Most of the existing work has focused on the risk to water company assets such as treatment works, reservoirs and strategic supply pipes and sewers. In contrast, if the safety and quality of the services are unaffected (because, for example, alternative assets can be used) the failure of a particular asset may not affect consumers.

We have identified a number of issues that will affect the resilience of water and sewerage services that are delivered to consumers. Finding solutions to these issues will not only require input from us and the companies we regulate. It will require all stakeholders to play their part. Before the next price review, we will set out our expectations on resilience issues to help the companies plan their investment proposals.