Utility Week Awards winner case study: Utility of the Year 2018

The utility sector is under the spotlight like never before. In the last twelve months Anglian Water has systematically, repeatedly and successfully tackled operational and reputational challenges, building on more than a decade of leading performance – most notably in leakage and service.

The company says its approach is to innovate, learn and share, pushing the frontier for the whole industry while enabling the creation of a region in which it is a pleasure to live, learn and work. Years of insight and expertise were combined with half a million customer interactions to create its business plan for 2020-25, submitted to the regulator Ofwat in September 2018. It sets out to tackle the challenges faced by the driest and one of the fastest-growing regions in the country.

Anglian Water is geographically the largest water company in England and Wales, supplying more than six million customers. For more than a decade, it says, it has pushed the boundaries of operational excellence, resilience and efficiency achieving leading positions in leakage and service, while recalibrating customer relationships with our Love Every Drop strategy.

The company says its position gives it the responsibility to do more for customers and its region, and this has never been more important than during an exceptional last twelve months.

The region

Anglian’s region faces unique challenges, with two thirds the UK’s average rainfall and one in five new homes being built there. The company’s 25-year vision in response to this challenge – its “strategic direction statement” – was first published in 2007 and refreshed this year following widespread consultation.

Its four long-term ambitions underpin the firm’s business plan submitted in September 2018, after more than half a million customer interactions – ten times more than at PR14. This engagement has shaped Anglian’s plans like never, eschewing traditional consultations for on-going dialogue, ensuring rapid response to changing customer expectations. More than 80 per cent of customers the company engaged endorsed its plan.

Doing the basics brilliantly

• Number one in SIM, 2017/18, 15 years of upper-quartile service performance
• Most improved Compliance Risk Index score of any company over three years
• Event Risk Index of 10.8, less than 5 per cent the national average of 249
• One of industry’s best drinking water acceptability complaint rates
• Catchment management approach to reducing metaldehyde recognised by DWI as leading
• Never subject to punitive DWI Transformation Programmes
• 84 per cent blockage reduction in 2018 after 2,000 Keep it Clear visits
• On track for 4-star EA Environmental Performance Assessment

Leading leakage

Anglian leads the industry, having cut by more than a third since privatisation to record low levels at half the national average (water lost per km of main). This year Anglian is surpassing its target of 192 Ml/d, achieving 183 Ml/d. This contributes to a 10 per cent cut 2015-2020, to which the firm is adding a further 22 per cent by 2025.

Weather challenges

Anglian has exceeded its interruptions to supply target every year in the current AMP, and in March successfully protected customers from the Beast from the East. Planning, resilience investment, industry-leading leakage, unique alliancing, excellent communications, plus a capable, motivated workforce, meant almost no customer impact from the cold.

Operational resilience was again tested during summer’s heatwave. Again, no customers saw interruptions due to unprecedented heat, nor did Anglian contemplate usage restrictions.

Both leakage and interruption to supply measures remain ahead of target, despite more bursts caused by fluctuating weather.

Role in society

Wisbech is one of the region’s most deprived towns. Anglian says it has worked intensively there this year, growing its project from grassroots community work to a 10,000-home garden town proposal based on globally-leading approaches to flood risk modelling.

The company’s College of West Anglia apprenticeship programme combats youth unemployment while developing tomorrow’s construction workforce. The company also campaigns with MP Stephen Barclay for the relaying of the rail link to Cambridge.

Setting standards

Utilities are in the spotlight. This year Anglian’s board committed to steps that improve the perception of its business and sector. It was the first to remove its Cayman company – with which it says it never gained tax advantage. The company also committed to reduce debt/gearing, changed its board so independent non-executive directors are the majority, and committed to reinvest £165 million this AMP into drought resilience and customer experience. Anglian believes it has moved fastest and gone furthest in response to the legitimacy challenge.

In 2017/18, it became the first European utility to raise a Green Bond. Its approach to carbon, governance, and its alliances mean the Bond is accredited to the whole capital programme, not just specific projects.

In December 2017, Anglian developed, with Arup, a model to assess organisational “resilience-in-the-round”, which six other companies have subsequently adopted in their business plan submissions. Arup’s model shows Anglian is leading in many areas, and actively improving in others.

Innovating

This year Anglian launched “Water Resources East” – a collaborative, cross-sector approach to resource planning including agriculture, energy and the environment. This builds on its chairing of the industry’s “long-term water resources planning” report, which the NIC drew on extensively in its own assessment.

In 2018, Anglian launched its innovation hub around Newmarket – The Smarter Drop. More than 100 partners participate in 95+ projects. This builds on the 1,000 SMEs active through Anglian’s “water innovation network”. Anglian reduced consumption in Newmarket by 6 per cent, and leakage by 23 per cent, August 2017 to February 2018.

Anglian says it remains focused on climate change, and this year committed to carbon neutrality by 2050. In 2017/18 the company recorded a capital carbon drop of 57 per cent (versus 2010), and a reduction in operational carbon of 19.6 per cent. Anglian’s director of asset management, as chair of the government’s Green Construction Board Infrastructure Working Group, delivered an initiative in which government and industry pledged to save 24 million tonnes of carbon and £1.46 billion a year by 2050.

And Anglian says it shares its innovation globally. Earlier this year, to combat Cape Town’s drought, it made smart pressure controllers available to help the city save 45 Ml/d – three quarters of the total demand reduction of 60 Ml/d.

Supporting customers

Since 1989, enabled by efficiency, Anglian customers have seen the sector’s lowest bill increase – just 10 per cent versus an industry average of 46 per cent. The company reduced its average bill by 10 per cent 2015-2020. This was the biggest decrease of any company and twice the sector average.

Where households struggle to pay, Anglian offers a range of support, best exemplified through benefit maximisation, delivered in partnership with Citizens Advice. In the last year, customers involved realised a £2,900 average annual increase in benefits where they have unclaimed entitlements, more than an average household’s total water bills across an entire AMP.

Winner’s comment

Peter Simpson, chief executive, Anglian Water

“We’re extremely proud to be named Utility of the Year 2018. This award is a testament to all the hard work of our staff, partners and suppliers over the last 12 months.

“Water, along with other utilities, is vital in powering our region’s businesses and local economy, and in the East of England we face some unique challenges; being the driest, but fastest growing region in the UK.

“On top if that it’s been a challenging year; with extremes in weather from a freezing winter, to a long, dry summer, both of which we’ve managed without compromising service to our customers.

“Anglian Water has been leading the way in tackling some of the most pressing issues in our industry.  This year we’ve made a pledge to tackle plastic waste across the East of England, launched state-of-the-art technology to drive down leakage even further, concluded our biggest ever consultation with our customers, issued a second Green Bond to generate sustainable finance for the future, and been awarded first place in the water industry league for customer service by our regulator.

“This award is a fantastic end to 2018, but we won’t stop striving to be better; we’ll continue to do even more for our customers, businesses and the environment in 2019 and beyond.”

What the judges said…

Judges said the winning entry stood out for its strong leadership, business transformation, long-term thinking and all-round performance. They wanted to reward this company in particular for its proactive approach to dealing with some of the biggest issues facing utilities today. Water companies are high on the political agenda – and the winner recognised this and took action.

It’s a confident company, ready to get on the front foot without losing its focus on operational excellence.

The Utility Week Awards are held in association with CGI, Capgemini and Microsoft

The 2019 Utility Week Awards will be opening soon. Sponsorship opportunities are available – contact Utility Week business development manager Ben Hammond on benhammond@fav-house.com or 01342 332116 for more information.