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Water Company Water Resources Plans EA-WATER RESOURCES \ FIRST ANNUAL REVIEW OF Water Company Water Resources Plans E n v ir o n m e n t A g e n c y Published by: Environment Agency Rio House Waterside Drive Aztec West Almondsbury Bristol BS32 4UD Tel: 01454 624400 Fax: 01454 624409 www.environment-agency.gov.uk ISBN 1-85-705548-9 © Environment Agency All rights reserved. No part of this document may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the Environment Agency. HO-03/01 -300-A Printed on Cyclus print Contents Summary i 1 introduction 2 1.1 Background 2 1.2 April 1999 to March 2000 - a year in water resources 2 1.3 Structure of the report 4 2 Analysis of resource zone information 5 2.1 Household water meter penetration 5 2.2 Per capita consumption 5 2.3 Household occupancy rate 9 2.4 Leakage 14 2.5 Industry and commerce 14 2.6 Summary 14 3 Issues raised by water companies 19 3.1 Resource availability 19 3.2 Demand forecasts 19 3.3 Water efficiency 19 3.4 Leakage 20 4 Recommendations 21 References 23 environment agency 074587 £/V< WtU-tf CiX'6 OX 3 FI RSlMN NUAIIWEVI RGESf PLANSf - FIRST ANNUAL REVIEW OF WATER COMPANY WATER RESOURCES PLANS - March 2001 Summary This 1$ the Environment Agency's report on the • some companies have produced new estimates first annual review of water company water of future per capita consumption on the basis of resources plans. It covers the period from April 1999-2000 information. We need to look at the 1999 to March 2000. We are pleased to be able robustness of such estimates; to report that all companies have provided us • methods of estimating household occupancy with the information that we required. We are rates seem to play a significant part in the also pleased to report that all companies have calculation of per capita consumption. We need adequate plans for public water supply, to consider the relevant sources of information although some need to make progress to and the consistency of the assumptions adopted ensure adequate security of supply. by companies; In March 1999 all the water companies of England and • water companies have revised their estimates of Wales submitted water resources plans to the future meter penetration. We need to consider Environment Agency. These plans provided for the first the effects of these changes. time a clear picture of how the water companies of England and Wales planned to manage public water We will discuss all these issues with Ofwat, DETR, NAW supply to 2025. We reported to Ministers on these in and the water industry (through Water UK). june 1999 in a report entitled Planning public water supplies (Environment Agency, 1999). Ministers asked We have also noted matters that we will keep under the Agency to keep water companies' plans under active review with companies. We will consider the annual review. In February 2000, after consultation implications of these for future reviews of water with the Department of the Environment, Transport company plans and amend our data requirements and the Regions (DETR), the National Assembly for accordingly. Wales (NAW), Ofwat and the water industry, the Agency issued a template for the submission of annual The issues raised in this report demonstrate the value review information. In response to water companies' of the annual review of water company plans. DETR requests, we agreed that submissions covering the year and NAW have told us that they expect us to continue to April 2000 should be submitted by October 2000. with these reviews. We will work with DETR, NAW, Ofwat and the water industry to define the information Each water company's supply area consists of one or that should be provided for the 2000-01 review. We more resource zones. A resource zone is defined as the will consult before the end of April 2001 and write to largest possible zone in which all resources, including water companies with our requirements during May external transfers, can be shared and hence the zone in 2001. It is likely that we will expect 2000-01 which all customers experience the same risk of supply submissions to be produced by the end of September failure from a resource shortfall. In their annual review 2001. submissions, companies have provided the Agency with information on each resource zone. The analysis of resource zone information is an effective way both to identify issues that have already arisen and areas that will need to be tracked in the future. In our analysis, we have noted several important issues that require further attention: | FIRST ANNUAL REVIEW OF WATER COMPANY WATER RESOURCES PLANS - March 2001 _______ D 1 Introduction This is the Environment Agency's annual review plans provided for the first time a clear picture of how of water companies' water resources plans for the water companies of England and Wales planned to the year 1999-2000. Its objective Is to review manage public water supply to 2025. progress against companies' stated plans and to report on significant departures from the Only the plan submitted by South East Water was plans produced In March 1999. unacceptable to the Agency. This was principally because, in our view, the company had failed to plan for sufficient water supplies for the needs of its 1.1 Background customers in the short term. We asked South East Water to submit a new plan in October 1999. This In England and Wales, public water supply is provided proved to be more acceptable, but we will continue to by private water companies. The Environment Agency keep the company's actions under close scrutiny. is the statutory body with a duty for strategic water resources planning. Our role is to protect the long-term In their response to Planning public water supplies, future of the water environment while encouraging Ministers asked the Agency to keep water companies' sustainable development. In guidance in January 1999, plans under annual review. In February 2000, after central Government set out the legal framework within consultation with the Department of the Environment, which water companies operate: Transport and the Regions (DETR), the National Assembly for Wales (NAW), Ofwat and the water industry, the Agency issued a template for the *Each water company has a key duty to develop and submission of annual review information. In response maintain an efficient and economical system of water to water companies' requests, we agreed that supply. The Environment Agency has the duty to submissions covering the year to April 2000 should be secure the proper use of water resources in England submitted by October 2000. and Wales, within a general framework of policy and directions determined by the Secretaries of State. The Director General of Water Services has the duty 1.2 April 1999 to March 2000 - to ensure that companies can finance the proper a year in water resources conduct of their functions. The Secretaries of State, the Director Ceneral and the Environment Agency Following their submission of water resources plans to each have general environmental duties to take into the Environment Agency in March 1999, water account when considering proposals relating to the companies gave Ofwat their supply-demand balance functions of water companies." submissions in April 1999 as part of the requirements of the periodic review of water company price limits. (iMaintaining Public Water Supplies, Department of After the Environment Agency and Ofwat had the Environment, Transport and the Regions and previously arranged that the reporting requirements for the Welsh Office, January 1999) the water resources plans and the business plans were consistent, central Government asked Ofwat and ourselves to ensure that supply-demand balance In March 1999 all the water companies of England and submissions reflected the contents of companies' water Wales submitted water resources plans to the resources plans. We worked with Ofwat to provide Environment Agency. We reported to Ministers on commentaries on the companies' water resources these in June 1999 in a report entitled Planning public aspirations and to provide answers to particular queries water supplies (Environment Agency, 1999). These that were raised. FIRST ANNUAL REVIEW OF WATER COMPANY WATER RESOURCES PLANS - March 2001 _______ | In June 1999 the Water Industry Act 1999 was enacted. companies can ask Ofwat for an interim price Among other provisions, this allows household determination if Ofwat's assumptions about meter customers to choose to have a water meter fitted free. uptake are shown to be incorrect and if this has a Any household customer choosing to have a water material effect on the company's costs and revenues. meter fitted can revert to the previous charging basis within a year if they wish. The Act also banned the use The price determinations allowed for the funding of of selective metering except on change of house most elements of the Environment Agency's National occupier and for household customers with high Environment Programme (NEP). This programme, discretionary use of water. The latter includes uses such approved by central Government and the National as swimming pool filling and garden watering with Assembly, plans to improve the water environment by automatic sprinkler systems. The Water Industry improving the quality of effluent discharges and (Vulnerable Croups) Regulations 1999 spelled out the reducing abstraction by water companies at central Government's view for the need for social environmentally sensitive sites. We are working with equity to be considered in charging for water. The water companies on the implementation of this Water Industry (Prescribed Conditions) Regulations, programme and will be publishing a report in Autumn also made under the 1999 Act, make provision for 2001 detailing progress over the last 18 months.
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