14/07/08
The effect on planning for the public water supply of requiring water companies to reduce the amount of water they take from rivers and groundwater has created a lot of interest in recent days.
Not surprisingly in light of current pressure on household budgets the main focus of attention is the potential impact on water bills.
The cause of concern is that water companies will have to cut the volume of water they take from certain sources to protect wildlife species and habitats. Replacing this 'lost' water with new sources means a significant rise in the costs of ensuring a secure supply.
Water UK agrees that damaging abstractions - abstractions that damage the environment - should be reviewed and steps taken to mitigate or avoid them where appropriate. The industry has robust plans in place which are currently subject to public consultation. However some important questions need to be asked:
• What is the environmental damage and are there alternative ways of dealing with it?
• What are the costs and benefits of reducing or avoiding the damage?
• Is the water industry alone responsible for the damage, or are other parties involved?
• Is the water industry best placed to avoid the damage by its own actions?
• Should the costs of replacing the damaging abstraction licence be borne by water customers or is this a problem for the whole of society that should properly be shared by many others?
In many cases water companies have invested large sums on the basis of abstraction licences formally issued by the Environment Agency. They should be able to rely on using such licences for the benefit of their customers.
If the programme of volume reductions removes or curtails the rights of companies to abstract, they should be compensated for the new investment required to replace 'lost' licences with new ones. Moreover, they should be supported in this by the Environment Agency which has a duty to increase water resources and secure their proper and efficient use in England and Wales.
Compensation would prevent increases in customer bills, but is not on offer at the moment.
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Background
Water companies in England and Wales have published for consultation draft water resource management plans, which explain how they intend to supply enough water to meet demand over the next 25 years. The consultation period for most companies ends this month.
The plans have been produced and updated continually over the last 10 years, but this is the first time they are subject to public comment.
Company plans include a forecast of how much water will be required to meet the needs of customers and how much water is available. They follow government legislation and guidelines set by the Environment Agency, to ensure companies have sufficient water to supply the public and maintain adequate water in the environment.
Results will vary across the country according to population, demographics, climate change, and changing lifestyles. The final plans have a big impact on future water prices.
Final water resource plans will be published in April 2009.
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