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Price review 2009
PR09/15 20 June 2008 Dear Colleague Attached to this letter is a consultation document about our proposals for promoting water efficiency (the efficient use of water by consumers). Water efficiency has an important role to play in meeting consumers' needs and the needs of the environment. Consumers want safe, reliable water supplies. They want to be free to choose how much water they use, but they are also concerned about the environment. Water efficiency is about reducing waste, not restricting choice. And less waste means lower costs, lower bills, and less harm to the environment. We expect water companies to consider water efficiency measures as one of the options to maintain a balance between the supply and demand for water. We are proposing water efficiency targets to provide a focus for these expectations. In August 2007, we proposed voluntary water efficiency targets for each water company for 2008-09 and 2009-10. At that time, we said that we would propose more refined targets at PR09. Since then, as part of our work for the Water Saving Group (WSG) we have developed a more refined methodology with input from all stakeholders. The consultation paper details our proposals for setting annual water efficiency targets for each water company for AMP5 (the period from 2010-11 to 2014-15). We propose a two-tier target structure: base service and a sustainable economic level of water efficiency. Base service would apply to all companies, and we propose that each company has a minimum equivalent base service target. The sustainable, economic level of water efficiency would comprise companies' proposals for additional water efficiency activity as part of a sustainable, economic approach to balancing supply and demand. Our initial voluntary targets increased stakeholders' efforts to address the issue of water efficiency. Now that we have developed a more refined methodology, we will compare companies' water efficiency performance in 2007-08 and 2008-09 with the forthcoming AMP5 targets, and implement those targets on a trial basis in 2009-10. This will facilitate a smooth transition into reporting against the new targets in 2010-11 while continuing to focus all parties on the importance of water efficiency. It will replace the voluntary targets we set out last year. We welcome your comments on the proposals detailed in this consultation, and will use these comments to inform and develop our final proposals on water efficiency targets, which we will publish in autumn 2008 Please send responses to this consultation to Daryl Fossick by 12 September 2008. You can e-mail your responses to daryl.fossick@ofwat.gsi.gov.uk or post them to: Daryl Fossick Water Resource Economics Team Ofwat Centre City Tower 7 Hill Street Birmingham B5 4UA Paul Hope Head of Water Resource Economics  |
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