Portsmouth Water plc A summary of our Business Plan Submission to Ofwat - April 1999
OVERALL STRATEGY FOR THE AMP3 PERIOD AND TOP 5 STRATEGIC OBJECTIVES To meet present and achieve future new water quality obligations, particularly in respect of cryptosporidium requirements and achieving the interim lead standard of 25 µ g/l by 2003 with good progress towards the year 2013 standard of 10 µ g/l. To ensure customers do not suffer supply restrictions, even during dry summer conditions. To further improve customer perception of the Company and the water supply industry by striving to enhance customer service and publishing the Company's environmental credentials and achieving those environmental obligations agreed for inclusion in this plan. To encourage the efficient use of water. To maintain the Company's position at the water industry efficiency frontier. The strategy is supported by the evidence of research conducted by the Company in which customers identified water quality and security of supply as priority areas for investment.

PROPOSED PRICE LIMITS & EFFECT ON AVERAGE BILLS								TOP 5 QUALITY IMPROVEMENTS IN 2000-2005 PERIOD
		2000 -01	2001- 02	2002 -03	2003- 04	2004- 05		1. Meet the interim lead standard of 25 µg/l
	Proposed Price Limit for water and sewerage services							2. Deal with the risk of Cryptosporidium
1	Proposed Price Limit (Water Service)	4.0	4.0	4.0	4.0	4.0		3. Find a replacement for Hoe groundwater source and cease pumping to preserve an SSSI 4. Improve communication with the customers
2	Average Household Bill (today's prices)	74.82	77.81	80.92	84.16	87.53		5. Participate in two environmental studies
3	Average Household Bill paid	81.83	87.15	92.82	98.85	105.27
1	Proposed Price Limit (Sewerage Service)
2	Average Household Bill (today's prices)
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		55.08		Average household bill in 1999-2000		71.94
2	Total Capital Maintenance Expenditure - annual average		17.54		Less	(1) passing on past out-performance	(0.24)
3	Total Capital Enhancement Expenditure - annual average		18.61		Plus	(2) challenging targets for future efficiency improvements	(1.21)
						(3) the impact of improvements in water quality	7.93
RETURN CAPITAL						(4) improvements in service performance	1.45
Return on capital - (post tax) (%)			*			(5) Maintaining security of supplies to all customers	0.81
						Average household bill in 2004-2005	87.53

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