Water - Planning for the Future 28 th June 2012 East Midlands Councils Pete Davies, Senior Commercial Development Advisor

1.8 billion litres per day of drinking water cleaned and delivered to 7.4 million people 1.4 billion litres of waste water per day removed and cleaned from 8.5 million people Our customers are amongst the most water efficient in the country, using an average of 124 litres a day a person Our network of water mains is 46,000 km long Our network of sewers and drains is 128,000 km long We operate 126 water treatment works and 1,026 sewage treatment works. At £311 a year, we have the lowest average water bills in the country. Severn Trent Water 2

AMP AMP AMP AMP AMP AMP What is PR14? Periodic Review 2014 PR14 is the process under which we prepare our future business plans. 1.For our economic regulator, Ofwat, it is our Asset Management Plan (6 th since privatisation) for the period We highlight where we want to invest, and the associated impact on customer bills and OFWAT will ensure its fair and reasonable. 2.However for Severn Trent Water, we need to plan strategically over a much greater horizon (typically years). The first step on that journey is what we want to do in AMP6. 3 AMP

Severn Trent Water will have a multitude of challenges to balance in complying our business plan so our PR14 plans are our proposals for how we respond to these challenges, but....

...but we want the priorities of our customers and stakeholders to be at the heart of our plans. There are areas where we can be more flexible in our approach, and its here we want your views. For example: 1.Making sure we have enough water to supply our customers 2.Keeping our sewers working well 3.Keeping our services reliable 4.Reducing our effect on the climate 5.Adapting to a changing climate 6.Ensuring healthy and sustainable rivers 7.Delivering better customer service for households 8.Providing the services our business customers want 9.Being good neighbours 10.Helping customers who struggle to pay 5...lets look at the first in a little more detail.

We forecast what demand for water there will be … How many new houses will be built? What population growth will there be? What level of water usage will there be in the future? We work out what we will be able to supply … Water quality may deteriorate due to pollution Restoring Sustainable Abstraction (EA) could lead to us to taking less water from the environment Climate change impacts We work out what levels of service we will deliver and what level of risk we can take … Plan to have no more than 3 hosepipe bans in 100yrs Manage the risk that comes from having uncertain data about future demands and our ability to supply water How much water do we think we will be short of? We then identify solutions we could put in place, e.g. Leakage Control More metering Water efficiency Releasing any available supply we have New sources of water We Carry Out Least Cost Optimisation Working out the balance of getting the best mix of solutions at the least cost And so we create the Water Resources Plan Planned solutions for the next 25 years that will ensure we can supply our customers with the water they need. How do we build a Water Resources Plan? Whilst we undertake the technical elements, the Water Resources Management Plan will require both stakeholder input and customer choice. 6 Choices: How should we strike the right balance between securing supply and making environmental improvements? Should we accept more frequent hose pipe bans in exchange for lower bills? Appetite for metering, water saving behaviour?

J A SO N DJ F MA M JJ A SO N DJ F MA M J J A S O N DJ F MA M J Preliminary Stakeholder consultation Making the Right Choices consultation Draft plan for consultation Final Business Plan (to Ofwat) 21 May - Climate Change workshop 12 Jun - Water Services workshop 7 Phase 1 Shaping the Consultation Phase 2 Shaping the Plan Phase 3 Balancing the Plan Phase 4 Assessment AwarenessUnderstandingSupportAdvocacy Draft WRMP Final WRMP? WRMP Statement of Response Aim Phase Publications 19 Jun - Waste Water Services workshop Customer Challenge Group – aka Severn Trent Water Forum Role is to challenge, scrutinise and advise Independent Chair – Dame Yve Buckland Members include: EA, DWI, NE, CCWater, LA reps, CBI, NFU We are therefore undertaking a significant amount of stakeholder engagement over the coming months Jun -LGA Conference at NIA 31 Jul – Making the Right Choices Consultation closes Sept 12 – Customer consultation

In summary, we want to hear your views to enable us to make the right choices. Please look out for the Severn Trent Water stakeholder consultation on PR14 – in particular: – ‘Making the Right Choices’ consultation document on the web – Written consultation period for ‘Making the Right Choices April – end of July – Customer forums and workshops in autumn – Severn Trent indicative Business Plan and Water Resources Management Plan consultation – Mar Pete Davies, Severn Trent Water 8