Water - Planning for the Future

28th June 2012

East Midlands Councils

Pete Davies, Senior Commercial Development Advisor

• 1.8 billion litres per day of drinking water cleaned and delivered to 7.4 million people

• 1.4 billion litres of waste water per day removed and cleaned from 8.5 million people

• Our customers are amongst the most water efficient in the country, using an average of 124 litres a day a person

• Our network of water mains is 46,000 km long

• Our network of sewers and drains is 128,000 km long

• We operate 126 water treatment works and 1,026 sewage treatment works.

• At £311 a year, we have the lowest average water bills in the country.

Severn Trent Water

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AMP 72020 -2025

AMP 82025 -2030

AMP 92030 -2035

AMP 102035 -2040

AMP 112040 -2045

AMP 122045 -2050

What is PR14? Periodic Review 2014

PR14 is the process under which we prepare our future business plans.1.For our economic regulator, Ofwat, it is our Asset Management Plan (6th since privatisation) for the period 2015-20. We highlight where we want to invest, and the associated impact on customer bills and OFWAT will ensure its fair and reasonable.

2.However for Severn Trent Water, we need to plan strategically over a much greater horizon (typically 25-40 years). The first step on that journey is what we want to do in AMP6.

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AMP 62015 -2020

Severn Trent Water will have a multitude of challenges to balance in complying our business plan......

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...so our PR14 plans are our proposals for how we respond to these challenges, but....

...but we want the priorities of our customers and stakeholders to be at the heart of our plans.

There are areas where we can be more flexible in our approach, and its here we want your views. For example:1.Making sure we have enough water to supply our customers

2.Keeping our sewers working well

3.Keeping our services reliable

4.Reducing our effect on the climate

5.Adapting to a changing climate

6.Ensuring healthy and sustainable rivers

7.Delivering better customer service for households

8.Providing the services our business customers want

9.Being good neighbours

10.Helping customers who struggle to pay

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...lets look at the first in a little more detail.

We forecast what demand for water there will be …

• How many new houses will be built?• What population growth will there be? • What level of water usage will there be in the future?

We work out what we will be able to supply …

•Water quality may deteriorate due to pollution•Restoring Sustainable Abstraction (EA) could lead to us to taking less water from the environment•Climate change impacts

We work out what levels of service we will deliver and what level of risk we can take …

• Plan to have no more than 3 hosepipe bans in 100yrs• Manage the risk that comes from having uncertain data about future demands and our ability to supply water

How much water do we think we will be short of?

We then identify solutions we could put in place, e.g.

• Leakage Control• More metering• Water efficiency• Releasing any available supply we have• New sources of water

We Carry Out Least Cost Optimisation

• Working out the balance of getting the best mix of solutions at the least cost

And so we create the Water Resources Plan

• Planned solutions for the next 25 years that will ensure we can supply our customers with the water they need.

How do we build a Water Resources Plan?Whilst we undertake the technical elements, the Water Resources Management Plan will require both stakeholder input and customer choice.

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Choices:How should we strike the right balance between securing supply and making environmental improvements?Should we accept more frequent hose pipe bans in exchange for lower bills?Appetite for metering, water saving behaviour?.........

J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J

2011 2012 2013 2014

Preliminary Stakeholder consultation

Making the Right Choices consultation

Draft plan for consultation

Final Business Plan

(to Ofwat)

21 May - Climate Change workshop

12 Jun - Water Services workshop 7

Phase 1 Shaping the Consultation Phase 2 Shaping the Plan Phase 3 Balancing the Plan Phase 4 Assessment

Awareness Understanding Support Advocacy

Draft WRMP

Final WRMP?

WRMP Statement of

Response

Aim

Phase

Publications

19 Jun - Waste Water Services workshop

Customer Challenge Group – aka Severn Trent Water ForumRole is to challenge, scrutinise and adviseIndependent Chair – Dame Yve Buckland

Members include: EA, DWI, NE, CCWater, LA reps, CBI, NFU

We are therefore undertaking a significant amount of stakeholder engagement over the coming months.

26-28 Jun -LGA Conference at NIA

31 Jul – Making the Right ChoicesConsultation closes

Sept 12 – Customer consultation

In summary, we want to hear your views to enable us to make the right choices.

Please look out for the Severn Trent Water stakeholder consultation on PR14 – in particular:

– ‘Making the Right Choices’ consultation document on the web www.stwater.co.uk

– Written consultation period for ‘Making the Right Choices April – end of July 2012.

– Customer forums and workshops in autumn 2012.– Severn Trent indicative Business Plan and Water Resources

Management Plan consultation – Mar 2013.

Pete Davies, Severn Trent WaterPeter.davies@severntrent.co.uk

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