OUR PLAN EXECUTIVE SUMMARY 2020–2025 2 | STRATEGIC REPORT PR19 BUSINESS PLAN EXECUTIVE SUMMARY PR19 BUSINESS PLAN EXECUTIVE SUMMARY STRATEGIC REPORT | 3 CONTENTS INTRODUCTION INTRODUCTION ................................................................................................3 WHO WE ARE OUR APPROACH TO PR19 AND WELSH WATER 2050 .................4 Welsh Water has been owned by Glas Cymru since 2001. A CUSTOMER-DRIVEN PLAN .....................................................................6 Glas Cymru has no shareholders and therefore works BILLS AND AFFORDABILITY .......................................................................8 solely to enhance the interests of the customers and communities that it serves. DRINKING WATER ..........................................................................................10 ENVIRONMENTAL IMPROVEMENTS ........................................................11 RESILIENCE ...................................................................................................... 13 We provide a vital public service to THIS DOCUMENT around 3.1 million people in Wales This document summarises our DEMAND MANAGEMENT, WATER EFFICIENCY and neighbouring parts of England. business plans for 2020-25. It will be AND LEAKAGE REDUCTION ..................................................................... 15 We provide our customers with submitted to the industry regulator clean water that is safe to drink and Ofwat in September 2018 for their EFFICIENCY ....................................................................................................... 16 take their used water away, treating ‘PR19’ regulatory review. The plan is INNOVATION ......................................................................................................17 it so that it can be returned to the set in the context of our long-term environment. We recycle the organic vision, Welsh Water 2050, which CUSTOMER SERVICE ................................................................................... 18 material resulting from the wastewater resulted from a major consultation treatment process, generating CUSTOMERS IN VULNERABLE CIRCUMSTANCES ........................ 19 exercise with customers and valuable electricity and gas, passing stakeholders on how we should COMMUNITY AND PARTNERSHIPS......................................................20 on the end product to farmers to respond to the key trends and enhance the productivity of their land. FINANCIAL RESILIENCE ............................................................................. 21 challenges over the next 30 years. HOW WE WILL DELIVER OUR PLANS ................................................. 22 Many of our customers are businesses This provides a roadmap for each that depend on a reliable supply of 5 year price control and ensures that WE PROVIDE A VITAL BOARD ASSURANCE .................................................................................. 24 water, and developers with whom we our plans fairly balance the interests work in providing the infrastructure PUBLIC SERVICE TO AROUND of current and future customers. required to support the needs of a 3.1 MILLION PEOPLE IN WALES In the next section, we explain some growing population. AND NEIGHBOURING PARTS of the background to our plans, OF ENGLAND. We also have an important wider including what makes Welsh Water role contributing to the well-being of uniquely-driven by its customers. society at large, including through our Our business plan has taken the views contribution to a better environment, of customers as its starting point and our education programme and as the main driver of our decision- promoting access to the countryside, making. Each of the following sections such as via our visitor centres. then summarises, for each key area Around 10% of our customers in the of activity, our current performance, north east of our area are ‘wastewater- what our customers have told us, and only’ customers, their water service how our plans for the next five years being provided by Hafren Dyfrdwy and beyond deliver the outcomes (formerly Severn Trent Water and customers have asked for. Dee Valley Water). 4 | STRATEGIC REPORT PR19 BUSINESS PLAN EXECUTIVE SUMMARY PR19 BUSINESS PLAN EXECUTIVE SUMMARY STRATEGIC REPORT | 5 OUR APPROACH TO PR19 AND WELSH WATER 2050 as it has evolved. Having considered OUR VISION CUSTOMER ENGAGEMENT OUR LONG-TERM STRATEGY: WELSH GOVERNMENT AND these views, it set out early in the Because we provide an essential As a genuinely customer-driven WELSH WATER 2050 OTHER STAKEHOLDERS process a set of strategic parameters public service on which the health of business, our customers’ views, Our PR19 business plan is set firmly In developing our PR19 business for our PR19 plans. It then ensured individuals and communities depends, preferences and priorities are the in the context of our long-term plan we have been guided by Welsh our plans meet these objectives, are it is vital that we protect the trust of foundation of our business plans. purpose which is “to become a truly Government policy, as set out in both challenging and deliverable, our customers. This is why we work This is an ongoing process, and we world class, resilient and sustainable A Water Strategy for Wales (2013) and are informed by international best to a clear vision: “to earn the trust of are increasingly using our innovative, water service for the benefit of future its Strategic Priorities and Objectives practice, and are underpinned by our customers, every day”. Our PR19 digital Customer Sentiment Map to generations.” Following a major Statement to Ofwat (2017). We have a robust process of internal and business plan has been designed to improve our ability to bring together consultation exercise with customers also had regard to the Wellbeing of external assurance. make real progress towards this vision, and analyse data from our daily and stakeholders, we published Welsh Future Generations Act which, while OUR BUSINESS PLAN IS SET delivering better value for money for operations, thereby enhancing our The Customer Challenge Group Water 2050 in March 2018. It sets it does not directly apply to us, sets a FIRMLY IN THE CONTEXT OF all the households, businesses understanding of our customers (CCG) has provided an independent out the eight major challenges that framework which we fully endorse for OUR LONG-TERM PURPOSE and developers that we serve. and their needs. perspective on our customer we expect to face over the next long-term planning in relation to the WHICH IS ‘TO BECOME A involvement activities and has 30 years, and the 18 strategic people we serve (both in England We have also undertaken a major TRULY WORLD CLASS, challenged us both on our responses required to address them. and in Wales) and the environment. NOT FOR SHAREHOLDERS programme of customer engagement RESILIENT AND SUSTAINABLE engagement and on how these We have, therefore, mapped our Because we don’t have shareholders, for PR19, involving around 40,000 In order to be responsive to the needs WATER SERVICE FOR activities have influenced our plans. Welsh Water 2050 strategic we are able to return any financial customers. What this exercise has of both current and future customers, We have also discussed our AMP7 responses against the Act’s ‘well- THE BENEFIT OF FUTURE surplus to the benefit of customers told us about the priorities and we intend to start delivering on and Welsh Water 2050 plans with being goals’ (see chart below). GENERATIONS. – our ‘customer dividends’ – by concerns of our customers has this long-term commitment on a the independent Members of the reinvesting in the business for further formed the basis of decision-making prioritised ‘no regrets’ basis over In addition to the Welsh Government, Glas Group, who hold the Board to performance improvements or risk for our PR19 business plan. the next 10 years, at a pace which we have met regularly with, and account in the place of shareholders, reduction, or by returning the value is considered affordable by our been challenged by, our other key as well as with a ‘PR19 Forum’ of our directly to customers through our customers. Our chosen measures stakeholders and taken account of CHALLENGING OUR PLANS Welsh regulators (Welsh Government, social tariffs. We regularly consult of success for PR19 cover each of their views. These include NRW and Our Board has been fully engaged in Natural Resources Wales (NRW), the with customers as to how to apply these strategic responses, and will the Environment Agency (EA), the developing our plans from beginning Drinking Water Inspectorate (DWI), our financial surpluses. During the evidence the progress towards our DWI, CCWater, and members of our to end, devoting significant amounts and the Consumer Council for Water current five-year investment period, long-term goals made possible by the Independent Environmental Advisory of its time to understanding the views (CCWater). AMP6, we expect to distribute investments, which include improved Panel (IEAP). of customers and challenging the plan Wales A prosperous Wales A resilient A Wales healthier Wales equal A more communities cohesive of Wales A and culture vibrant of Wales A Wales A globally responsible some £150 million for the benefit of network resilience, environmental our customers, following extensive improvements, and dam safety. language Welsh thriving 1: Safeguarding clean drinking water through catchment management customer consultation in 2016 The progress achieved will