Utility management

Water and wastewater utilities across the country are facing many common challenges, including rising costs, aging infrastructure, increasingly stringent regulatory requirements, population changes, and a rapidly changing workforce. Effective utility management can help utilities respond to both current and future challenges and support utilities in their common mission of being successful 21st century service
providers.

This report presents findings on attributes of well-run public utilities and attempts to identify important factors that influence their performance. The scope is also largely oriented to utilities that serve urban communities, but with varying characteristics and service objectives. The report is primarily intended for policy makers in central and local governments but can be also useful to utility managers as well as sector professionals supporting utilities and governments in such endeavors.

The route to change for a given utility is unique, and there is no predetermined action plan of corrective measures that must necessarily be followed in sequence. Yet, as the findings of this study reveal, there is a broad process and some basic norms that are fundamental to success or, by contrast, similar actions that have helped to cause organizations to fail. The intent is therefore to share with practitioners such findings but allow them sufficient flexibility to structure these into a coherent reform program that would be appropriate to the specific conditions of the utility and the environment in which it operates. As such, the intention of this report is to move away from “one size fits all” and “best practice” approaches to one of “best fit” given the unique circumstances surrounding a given utility.

Infrastructure is more than contract signing and cornerstone laying. Once the ribbons are cut, adequate operation and maintenance is required to reach the life-time potential of the built assets. In many countries, the reality is far from this ideal; Public Utilities struggle to sustain their infrastructure systems. Daily work is dominated by fire-fighting problems, rather than by good business conduct.

The Swiss State Secretariat for Economic Affairs SECO has published a new Review and Tool on how Public Utilities evolve into effective institutions. We wanted to learn from successful utility turn-arounds. Eight successful cases were studied to extract the factors that led success. The Tool helps to assess where a utility is in its development or reform process and offers guidance on potential reform paths, accommodating for the political context of the utility. The Tool can support a structured dialogue amongst the stakeholders in a utility reform process, the formulation of a utility-specific reform strategy, and the monitoring of reforms.

The review and tool can be downloaded from the SECO Infrastructure Financing website in the download section at the bottom of the page.

This review is structured as follows. Chapter 2 provides some background on changing approaches to providing water services in past years, and introduces the concept of accountability and the various routes of accountability between service providers and users within the broader context of the corporate management of utilities. Chapter 3 systematizes and describes tools of accountability. It categorizes the tools according to four dimensions—driver, modality, formality, and targeting—and then describes 14 individual tools, whose purposes range from information provision to consultation, participation,  and redress. Chapter 4 assesses the outcomes that have been achieved by applying the tools. It starts by establishing a set of criteria to measure performance, and then discusses achievements in various environments in terms of effectiveness, inclusiveness, efficiency, and sustainability. Based on this assessment, Chapter 5 identifies some critical success factors in the application of tools for utilities at different stages of maturity, with the aim of assisting practitioners to choose the right suite of tools to match their circumstances. Chapter 6 concludes.

The report elaborated by the European Water Regulators (WAREG) provides a description of some approaches used in 17 WAREG Members’ countries to ensure the affordability of water and sewerage charges. It also provides a general overview of the governance frameworks and tools used in those countries. The main objective of this paper is to outline existing practices and to identify possible common patterns in regulatory mechanisms to ensure affordability of water services. This paper does not intend to give any indication of best practices.

This report analyses the application of Key Performance Indicators (KPIs) to describe efficiency of water services in WAREG member countries, with the aim to draw out commonalities as well as differences in monitoring of water efficiency measures and performance. It seeks to outline how different European regulators promote water efficiency within their regulated industries. It is noted that although various KPIs and benchmarking platforms exist in the water industry, there appears to be a lack of consistency in the definitions, descriptions, application and consistency of KPIs used to measure water efficiency across Europe. It is further noted that while some countries use KPIs for benchmarking purposes, this practice has still not been fully embraced by regulators in WAREG member countries.