Op-Ed by David Lynch, Co-Founder and CEO of Klir
Compliance can often be seen as a production requirement. Instead, it should be seen as the product, and as such, as the core purpose of a water utility. Yet, there is often a disconnect between the spirit of regulations and their practical implementation on the ground. And this often results in an onerous burden on water service providers.
The first iteration of regulations broadly sought to address challenges with obvious links to environmental and human health, i.e. the treatment of drinking water or raw sewerage. In western democracies, these regulations attract bipartisan support, but are implemented in most cases. In Europe, this has culminated in 2000, with one of the most progressive and ambitious pieces of legislation: the Water Framework Directive. At a basic level, the directive takes an epidemiological approach to water management. It looks at what makes the water body ‘sick’ and requires to treat the cause of the illness, rather than the symptoms.
Revision of the Water Framework Directive
The directive is, in itself, relatively simple and short (only 20 pages long). But, the implementation, technical instructions, myriad of daughter legislation, process and reporting requirements often break the links between a water utility’s mission and regulatory requirements. The success of the WFD 18 years after initial implementation is widely debated and a revision of the directive is due in 2019. Nevertheless, the WFD does represent a fundamental shift in what regulation is going to look like over the next 50 years.
Instead of broad legislative measures being sweepingly enforced at a state, multi-state or federal level, regulations will be more pointed. They will be used as a tool to tweak the anthropogenic activities in a catchment to improve a system’s environmental health. This presents significant opportunities for water operators.
For example, if the background level of nutrients in a waterbody in which wastewater is being discharged is already high, logic will follow that the onus of costly treatment will fall on the polluters upstream, rather than solely on the wastewater operators. Of course, today this rarely happens – it is easier to regulate point source than diffuse pollution. So a disproportionate level of the burden falls on operators as the nexus point between multiple water stakeholders.
Data, at the Core of the Challenge
Often, existing legislative framework around the globe already supports a ‘polluter-pays’ principle and with the continuing legislative adoption of approaches like Integrated Catchment Management as well as the WHO Drinking Water Safety Plan this will only continue to be solidified in legislation. But how can water service operators capitalize on this approach? There are many views and silver bullet solutions. But fundamentally, data is at the core of the challenge. AI, Machine Learning as well as evolution of hardware is often touted as the next big thing but without a single source of the truth, the experts cannot use those tools effectively.
Research we carried out recently highlighted that, in a water utility today, the largest proportion of operational cost is labor. 1 in every 2 staff in a utility is impacted by quality, environmental and regulatory workflows. 20 – 50% of the time of those responsible for compliance-related tasks is spent on repetitive work like chasing or maintaining data, executing offline workflows or reacting to requests from regulatory stakeholders.
In order to meet the changing face of water regulations and deploy resources more effectively to meet emerging challenges like Combined Sewage Overflow, Climate Change, Pesticides and supply rationalization, efficiencies need to be gained in how this is managed in water utilities.
Maximum Impact on Human Health and the Environment for a Minimal Investment
By looking at a similar challenge in another vertical, we can see the benefits and pathway to a solution. About 30-35 years ago, sales and marketing were primarily done off Rolodexes. Then, in the early 80s the concept of database marketing was invented. Customer data was managed in lists and spreadsheets to try and qualify the leads. Throughout the 90s and early 2000s, this morphed into systems with rich functionality that tie together multiple functions of a business into a single focused mission, with automation and integration playing a key part. Now when you look at a typical CRM implementation, the return can be as much as 9 times in revenue.
There are a lot of similarities between this and water management. Where CRM focuses on sales, water management solutions focus on what will have the maximum environmental return i.e. what activity will have the maximum impact on human health and the environment for a minimal investment.
Ultimately, a utility needs to manage a pipeline of activities and requests to choose those tasks that have the maximum impact. It is interesting to note that some of these activities can be seen both from a regulated entity and a regulator’s perspective (e.g. permitting industrial discharges to assets). If we look at the water utility today, we are at the database marketing stage: we have structured data but no system to support the full life cycle to complete the sale. SCADA, LIMS, Asset management systems etc. give us plenty of ‘signals’ or ‘leads’, but a systematized process and single source of the truth is required to take those signals through to completion.
Bringing Regulatory Compliance Data Together…
Some utilities have implemented an environmental information management system. These custom-built applications generally run into the multi-million Euro or Dollar Capex cost. They also represent a significant recurrent overhead to keep the systems up and running (although this cost is coming down with cloud technologies).
We worked with Irish Water on an application to manage urban wastewater compliance investigations. To give context, Irish Water was established less than 5 years ago to amalgamate 31 water services authorities into a single state-owned water utility (1,000 Waste Treatment Plants and 900 Drinking Water Plants for a population of c. 3.3million). There was significant non-compliance with both Urban Waste Water and Drinking Water standards. For example, at the start of 2015, 23,297 consumers were on boil water notices. Ireland was also the subject of an Infringement Case by the EC for failure to meet the requirements of the EU Urban Waste Water Treatment Directive.
The application gives a single view of the data so that the compliance management team can understand work on-hand and prioritize tasks based on structured data such as Due Date, Severity, Impact etc. This system also contains extracts of compliance metadata provided in real time by the Irish Environmental Protection Agency. This combined view of compliance data, (i.e. from EPA and Irish Water) gives Irish Water the 360-degree visibility they need to respond to compliance tasks in a timely and efficient manner. The system also provides Irish Water management with the ability to assign work to their colleagues and set due dates against tasks, so that they are in control of the work to carry out.
… and Reaping the Benefits
The results have been impressive. Primary benefits include:
- 80% reduction in requests for further information from EPA
- 60% reduction in lead time reporting to regulators
- 90% reduction in non-compliance due to reporting
- Redeployment of 3 full-time employees from compliance and workflow team to address Combined Sewage Overflow projects
- But utilities like Irish Water – i.e that can afford these heavy implementations – generally represent less than 0.5% of the market as few have the critical mass to enable a meaningful ROI at this cost.
Meeting Changing Regulatory Patterns
By taking this initial step towards a centralized, systematized single source of environmental truth for their organization, water utilities are improving their data and allowing for rich analysis to meet changing regulatory patterns. Moreover, as this data becomes more centralized and cleansed, challenges can be mounted on permit limits imposed by regulators based on empirical data that there is consensus on.
The future of water regulations is a holistic integrated approach to water management in a catchment or watershed. This requires multiple stakeholders to interact regularly and in real time which is a significant challenge for our industry and those who have a dependency on water services.
In order to address these challenges, a single agreed version of enterprise compliance data as well as the processes that support them will be absolutely necessary to reduce risk, improve efficiency, increase compliance and improve asset investment.
Would like to know more about managing regulatory compliance more effectively? Contact us to see a live demo.