Dee Valley Water - company plan for future services
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DEE VALLEY WATER

A summary of our Business Plan Submission to Ofwat - April 1999

 OVERALL STRATEGY FOR THE AMP3 PERIOD AND TOP STRATEGIC OBJECTIVES

At the core of the strategy for the AMP3 period the Company has focused on a prudent and well targeted programme of investments in its assets to establish and maintain a level of service to customers that is amongst the highest in the industry. On top of this there are obligations imposed which are not as yet clearly defined but which potentially could have a major effect on the Company's activities over the AMP 3 quinquennium and, as a consequence, on water charges.

In this business plan the Company has endeavoured to strike a balance between a strategy based on sound engineering principles, customer service, external pressures and water charges.

The five most important strategic objectives are:-

1. A major renovation of the treatment works supplying the City of Chester

2. A substantial acceleration of the rate of replacement of old cast iron mains in the Chester area

3. The completion of the renovation of old cast iron mains causing discolouration of water in the Wrexham area

4. Work to comply with the new more stringent standard for lead in drinking water

5. A substantial reduction in the occurence of poor pressure problems throughout the area



PROPOSED PRICE LIMITS & EFFECT ON AVERAGE BILLS
2000-01
2001-02
2002-03
2003-04
2004-05
TOP 5 QUALITY IMPROVEMENTS IN 2000-2005 PERIOD
1
Proposed Price Limit (Water Service)
-2
0
0
0
0
1. Compliance with the new standard for lead by the year 2003
2
Average Household Bill (today's prices)
98.02
97.66
97.54
97.58
97.69
2. Substantial reduction in discoloured water problems by the year 2005
3
Average Household Bill paid
113.85
117.27
120.79
124.41
128.14
3. Improvements at two treatment works to deal with manganese by the year 2004
1
Proposed Price Limit (Sewerage Service)4. Substantial reduction in the number of poor pressure problems by the year 2004
2
Average Household Bill (today's prices)5. Making free optional meters more widely available to customers over the next five years
3
Average Household Bill paid

PROJECTED EXPENDITURE NEEDS
Annual average for the AMP3 period (£/property/annum)
WHAT IS DRIVING THE CHANGES IN BILLS
1
Total Operating Expenditure - annual average
Average household bill in 1999-2000
100.2
2
Total Capital Maintenance Expenditure - annual average 

52.97
Less

 

(1) passing on past out-performance7.45
3
Total Capital Enhancement Expenditure - annual average 

11.71
(2) challenging targets for future efficiency improvements3.13
Plus

 

 

(3) the impact of improvements in water quality1.22
RETURN CAPITAL
Annual average for the AMP3 period
(4) improvements in service performance0.43
1
Return on capital - (post tax) (%)(5) Maintaining security of supplies to all customers6.42
Average household bill in 2004-2005
97.69


For further information contact: Mr B.Bellis Engineering Director


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