WAREG is a platform that European Water Regulators can use to address common problems and challenges. As well known, the first step to addressing any issue is being aware of it, and good quality data are needed to be aware of it. Good quality data means Key Performance Indicators (KPIs), the most important metrics evaluated to understand how an organisation or, in this case, a water utility, operates.
Across Europe, there are many different performance indicators methodologies and approaches, as no unified approach has been introduced. In time academia and research have applied various indicators, each capturing a specific dimension of the water sector, in order to respond to the unique historical and social conditions. Given the vast choice, regulators could freely build their KPIs methodology, choosing those that are considered the fittest to give back a precise instant of the water sector. Having so many approaches and KPIs in place has brought notably very different systems from country to country. WAREG has then decided to open an ad-hoc task force on this topic, aiming to improve water management practices, enhance the regulatory toolkit of European Regulators, and start the harmonisation process of key performance indicators across Europe.
Most of the 24 members of WAREG have been directly involved in the working group, with 16 members actively participating in the discussions and sharing their experiences. The group has been a valuable platform for water regulators to exchange ideas and collaborate on common challenges, such as improving data collection and validation processes and setting targets for water utilities.
The working group has started its activities with a questionnaire to gather information from WAREG members on the KPIs they use and the processes they have in place for monitoring and evaluating water utilities. The questionnaire covers various topics, including information on data collection and validation processes, KPIs monitoring, data publicity, and KPIs methodology. 20 members have provided information in the survey, 18 of which apply KPIs. Information for 388 KPIs have been shared by the members.
The working group was established in 2022 and has organised 10 thematic workshops in 2022. The meetings have covered a range of topics related to KPIs, including:
- online data collection and validation processes
- validation instruments for reported information
- data publicity, target setting, and implementation of monitoring;
- the reflection of KPIs into tariffs;
- water losses KPIs and non-revenue water KPIs;
- energy efficiency KPIs;
The work of the group continues in 2023 with workshops reviewing different categories of KPIs. The working group on KPIs will present a final report drafted from the analysis of the KPIs questionnaire, and the results of the several meetings had with Members.
The questionnaire results have provided valuable insights into KPIs across Europe. The findings have shown that there is a wide range of KPIs to monitor and evaluate the performance of water utilities. Some commonly used KPIs include water losses, non-revenue water, energy efficiency, asset management, and water continuity and bursts.
Regarding data collection and validation processes, some regulators impose standards for internal water services operators’ (WSO) information sources, while others rely on the WSOs to provide the data. Additionally, there is a wide range of periodicity of WSOs reports, with some regulators requiring monthly reports and others requiring yearly reports.
Regarding KPIs targets setting and monitoring, some regulators set targets for water utilities and monitor their implementation, while others rely on the WSOs to set their own targets and monitor their own performance. Additionally, the results have shown that there are some KPIs models outside of the regulatory one, with some water regulators using alternative models to monitor and evaluate the performance of water utilities.
The results of the questionnaire have also shown that there is a wide range of data publicity practices across WAREG members. Some regulators provide annual reports and other information to the public in both their own language and in English, while others provide limited information or none at all.
The cooperation among WAREG members has been crucial for the working group’s success. Through answering the questionnaire and participating in the meetings, members have shared valuable information and best practices on data collection and validation, target setting, monitoring, data publicity, and KPIs for tariff setting. This has allowed the working group to identify the common challenges and opportunities in using KPIs by water regulators. Furthermore, each Member has sent those working on setting the KPIs to participate in the working group. By doing so, WAREG could organise high-level discussions and meetings, given the average expertise of the participants. The high level of knowledge about KPIs has also allowed the working group to effectively analyse the questionnaire and draft some conclusions on the topic.
One of the key findings of the working group has been the importance of a clear and consistent definition of KPIs. This includes the methodology used to calculate them, the units of measurement, and the information required for the variables in the numerator and denominator. By establishing clear definitions, regulators can ensure the KPIs are comparable across different countries and utilities.
Another important aspect the working group addresses is the need for online data collection and validation processes. This will allow regulators to gather and validate the information required for monitoring and assessment efficiently and effectively. Implementing online data collection processes will also facilitate data publicity, providing stakeholders with easy access to information on the performance of water utilities.
The reflection of KPIs targets into tariffs is also an important aspect that the working group has discussed. Regulators need to ensure that the tariffs reflect the costs of providing high-quality water services and promote the efficient use of resources. By considering the KPIs in setting tariffs, regulators can incentivise water utilities to improve their performance and provide high-quality services to customers.
The working group on KPIs has also addressed the specific KPIs related to water losses, non-revenue water, energy efficiency, asset management, water continuity, and sewerage flooding. These KPIs are crucial for monitoring the performance of water utilities and ensuring the efficient use of resources. Regulators need to consider the specific challenges and opportunities related to each of these KPIs and ensure that they are effectively implemented and monitored.
Finally, the working group has highlighted the importance of data publicity and the new information requirements related to data dissemination. Regulators need to ensure that information on the performance of water utilities is readily available to stakeholders, including the public. This will promote transparency and accountability in the water sector and help build stakeholder trust.
In conclusion, the working group on KPIs organised by WAREG has been a valuable platform for exchanging best practices and experiences among the members. The report produced by the working group will provide valuable insights into the use of KPIs by water regulators and highlight the key challenges and opportunities in this area. This will help promote the efficient use of resources, improve water utilities’ performance, and provide customers with high-quality water services.