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Getting ahead of utility regulatory compliance

9 October 2023

As a high-risk industry, the utility sector is highly-regulated. This is to ensure businesses provide critical services for communities in a safe, reliable and environmentally responsible way. Particularly with advancements in technology, regulations can change and become more complicated, making it harder for businesses to ensure they’re keeping up with updated regulations. But regulatory obligations can be easy to follow with the help of a comprehensive management system.

Xugo - utility regulatory compliance

Regulations in the utility industry

For utility businesses, following regulations requires successfully managing a variety of small tasks across personnel, teams and geographical locations which make up all aspects of business.

As a result, maintaining compliance can become complicated to keep track of as all departments and personnel must be made aware of existing and updated regulations. Even those working for them, such as external contractors, must consistently follow the relevant laws and organisational standards.

Regulations can originate from federal, state, and local levels, and can change overtime with new consumer behaviour and updated legislation.

Utility businesses’ expenditure is also highly-regulated to ensure consistency and safe practice. For example, expenditure in energy networks must be justified to the relevant regulator, such as the Australian Energy Regulator in pricing and revenue proposals.

Failing to comply with such regulations can result in considerable penalties.

Consequences for not meeting regulatory requirements

Managers within the utility industry suggest maintaining regulatory compliance is the greatest challenge facing their businesses.

The potential consequences of not meeting regulatory requirements are significant and can affect all levels of operation, including risks to the health and safety of staff, contractors and customers, major disruptions to essential services, increased costs to the taxpayer, financial penalties, and reputational damage.

Regulators treat breaches in regulation very seriously and can impose sever and costly penalties to businesses. For example, in 2021, Energy Safe Victoria issued 223 infringement notices and completed more than 20 prosecutions, including fines over $100,000 for non-compliance.

But the human and business costs are also significant, since serious health or safety incidents can result in property damage, injury, or death.

According to the Retail Electricity Pricing Inquiry Final Report Executive Summary, complex regulations and the consequences of failing to comply, result in dedicating additional resources to maintaining compliance each year, at a great cost to businesses.

Vegetation management

One key regulatory area for the utility industry is vegetation management.

Vegetation management is one of the most costly operational expense for electricity providers in Australia.

The Energy network provider vegetation management variability report found that energy network operators spend millions of dollars dealing with vegetation near powerlines annually in order to mitigate the risk of service disruptions and bushfires.

Yet regulations and standards can vary between and across energy networks.

Close-growing vegetation, such as tree branches, can interfere with powerlines, causing power outages and damage to network assets. In worst case scenarios, some vegetation can cause bushfires or electrical safety hazards.

Not complying with vegetation management regulations can quickly become costly given the potential dangers posed by encroaching branches.

Variations in regulations across state and federal legislation can also affect costs as concerns such as environmental protection, threatened native species, Indigenous cultural heritage, biosecurity, heritage significance, chemical handling, and road use must be considered.

How a WMS can help

Breaches in regulations often result from an underdeveloped work management, communication failures, and the inability to visualise workflows across a business. Without a work management system (WMS), it can be difficult to keep with changing regulations and consistently complying with existing ones.

Good decision-making and regulatory compliance requires accurate, up-to-date and comprehensive data. Without real-time updates and data collection, businesses are just playing catch-up instead of appropriately following and incorporating regulations into their workflow.

According to a 2018 report by McKinsey & Company, implementing intelligent digital systems can see utility companies achieve 20 to 40 per cent improved performance in regulatory compliance.

Integrating a WMS into business operations can not only help with compliance, but also other areas, such as planning, communication, reporting, collaboration, remote work, billing, and customer service.

But a good WMS must be tailored to suit a business’ needs to employ solutions that support and enable an organisation’s operations and activities.

Xugo's capabilities

Xugo is a cloud-based WMS, which is designed to connect processes, personnel, and programs across an entire business to help with regulatory compliance.

In the area of vegetation management, Xugo has assisted utility clients with compliance relating to precarious vegetation and keeping up with changing standards.

Completely configurable to your business needs, Xugo offers an easy-to-use system to keep all levels of operations on the same page in regards to regulations and standards. Xugo offers a database of information and real-time incident reporting to streamline compliance activities, including carrying out inspections, asset replacements, safety checks, audits, and incident investigations.

Xugo is intuitive, customisable, and versatile, which means you don’t have to re-engineer your business to use the software. In fact, Xugo can be used on all browsers, operating systems, and mobile devices, and works seamlessly with existing software and systems.

Want to learn more about Xugo

With SFI's Xugo, you can make your operations more efficient with full overview of your vegetation management activities - annual planning, coordination of LiDAR collection and analysis, field service activities, track & allocated work, schedule resources, reporting, management of incidents & equipment inspections. Get in touch and follow us on LinkedIn.