Periodic Review of
Water Price Limits 2004
(PR04)
Company Information
Preliminary Assessment Summary
As part of the PR04 process, twenty-three water companies in England and Wales submitted, in October 2002, their preliminary assessment of drinking water requirements to DWI in response to Information Letter 13/2002. After an initial challenge by DWI, the preliminary submissions were used to inform Ministers and Ofwat as to the potential size of the drinking water quality programme for PR04. A summary of the submissions is presented below:
| Quality Driver | Units | Quantity |
| Renovation of the Distribution System | kms of water mains | 25,000 |
| Nitrate removal treatment | No. of schemes | 94 |
| Pesticide removal treatment | No. of schemes | 54 |
| Trihalomethane reduction treatment | No. of schemes | 21 |
| Turbidity reduction schemes | No. of schemes | 156 |
| Cryptosporidium removal treatment | No. of schemes | 54 |
| Other water quality treatment schemes | No. of schemes | 161 |
| Schemes to improve the acceptability of water to consumers | No. of schemes | 189 |
| Lead Pipe Replacment to meet 10 µg/l standard | No. of lead pipes | 2,270,985 |
Key Next Steps
- DWI has commented to each water company individually on the preliminary submission, and has met with twenty water companies to date for detailed discussions.
- Water companies to make detailed submissions for individual schemes to DWI by 23 May 2003.
- DWI to provide a preliminary opinion as to whether individual schemes are justified by 30 June 2003.
- Water companies to include justified schemes in their Draft Business Plan submissions to Ofwat by 15 August 2003.
June 2003 Submission of Proposals
Water companies submitted detailed proposals for each individual scheme in June/July 2003 in response to Information Letter 4/2003. DWI carried out a preliminary assessment of the schemes and issued Preliminary Opinion Letters (PoLs) setting out whether DWI was minded, or not, to provide technical support for the schemes to be included as Quality programmes in water company draft business plans.PoLs were circulated to other stakeholders for comment. A summary of the programme is provided below. Detailed assessment and technical audit of these schemes is in hand, with a view to providing water companies with a Letter of Support (LoS), or otherwise, for them to include the schemes in their business plans to be submitted to Ofwat in April 2004. LoS will take account of Ministerial guidance on the quality programme.
December 2003 Issue of Letters of Support
Following on from the issue of Preliminary Opinion letters, DWI continued with further more detailed assessment of the justification of need for those schemes which had received preliminary support and any other schemes where companies had provided further justification/evidence.
The assessment methodology used for the drinking water quality programmes of work for PR04 is set out in IL 5/2003. The approach is primarily based on assessment of cost effectiveness, with cost benefit considerations taken into account for the specific areas of taste, odour and hardness.
The cost effectiveness approach is used to determine the work needed to achieve the statutory requirements and maintain levels of service at least cost, and is the default method for all scheme appraisals. The cost benefit approach is used to determine the work needed to achieve statutory requirements and to improve the service where it can be shown that the benefits to consumers outweigh the cost of any improvements. The scope of the service valuation analysis depends on the merits of including wider social and environmental costs and benefits within the analysis, in addition to the costs and benefits of the service improvements identified by the water companies and their consumers.
Where a Letter of Support has been issued for a particular scheme, this has been issued with the caveats that support is subject to confirmation by Ministers in their further guidance on PR04, and that the audit of selected company schemes proved satisfactory. Ministerial Guidance is due to be published by the end of January 2004 and the audit reports by early February 2004. DWI expects to confirm to companies by 13 February (subject to Ministerial Guidance) that those schemes issued with a Letter of Support continue to be supported.
Details of Letters of Support are set out below (N.B. These details are subject to update and revision).
Drinking Water Quality Programme by Company – England
| Company | No. Schemes Submitted | No. of schemes to date | ||
| Issued with a Letter of Support | Issued with a Letter Declining to Support | Issued with a Withdrawal Letter | ||
| Albion Water Ltd | 0 | 0 | 0 | 0 |
| Anglian Water Services Ltd | 42 | 28 | 6 | 1 |
| Bournemouth & West Hampshire Water plc. | 0 | 0 | 0 | 0 |
| Bristol Water plc. | 13 | 0 | 0 | 0 |
| Cambridge Water Company plc | 4 | 0 | 0 | 0 |
| Cholderton & District Water Company Ltd | 0 | 0 | 0 | 0 |
| Folkestone & Dover Water Services Ltd | 8 | 0 | 1 | 0 |
| Hartlepool Water plc | 0 | 0 | 0 | 0 |
| Mid Kent Water plc | 7 | 4 | 2 | 0 |
| Northumbrian Water Ltd (including Essex & Suffolk Water) |
7 | 5 | 0 | 0 |
| Portsmouth Water plc | 10 | 8 | 1 | 0 |
| Severn Trent Water Ltd | 33 | 11 | 12 | 1 |
| South East Water plc | 12 | 0 | 0 | 0 |
| South Staffordshire Water plc | 1 | 0 | 0 | 0 |
| South West Water Ltd | 40 | 17 | 18 | 3 |
| Southern Water Services Ltd | 11 | 4 | 2 | 0 |
| Sutton & East Surrey Water plc | 1 | 0 | 0 | 0 |
| Tendring Hundred Water Services Ltd | 2 | 0 | 1 | 0 |
| Thames Water Utilities Ltd | 12 | 10 | 1 | 0 |
| Three Valleys Wate plc | 11 | 5 | 5 | 0 |
| United Utilities Water plc | 109 | 76 | 13 | 5 |
| Wessex Water Services Ltd | 29 | 22 | 3 | 3 |
| Yorkshire Water Services Ltd | 30 | 23 | 2 | 2 |
| TOTAL | 382 | 213 | 67 | 15 |
Click on supported schemes (in pdf format) to view more details of where and what improvements are proposed.
Drinking Water Quality Programme by Company – Wales
| Company | No. Schemes Submitted | No. of schemes to date | ||
| Issued with a Letter of Support | Issued with a Letter Declining to Support | Issued with a Withdrawal Letter | ||
| Dee Valley Water plc | 0 | 0 | 0 | 0 |
| Dwr Cymru Cyfyngedig (Welsh Water) | 16 | 8 | 3 | 1 |
| TOTAL | 16 | 8 | 3 | 1 |
Click on supported schemes (in pdf format) to view more details of where and what improvements are proposed.
Programme by Driver - England
| Quality Driver | No. of Schemes submitted | No of Schemes given Preliminary Support | No of Schemes (to date) | ||
| Issued with a Letter of Support | Issued with a Letter Declining to Support | Issued with a Withdrawal Letter | |||
| Renovation of the Distribution system | 8 | 7 | 5 | 0 | 0 |
| Nitrate removal treatment | 84 | 71 | 61 | 8 | 2 |
| Pesticide removal treatment | 27 | 18 | 16 | 11 | 0 |
| Trihalomethane reduction treatment | 14 | 7 | 6 | 8 | 0 |
| Turbidity reduction schemes | 36 | 30 | 18 | 7 | 3 |
| Cryptosporidium removal treatment | 32 | 30 | 29 | 1 | 2 |
| Iron/Manganese removal treatment | 23 | 19 | 11 | 9 | 1 |
| Plumbosolvency treatment schemes | 12 | 12 | 0 | 0 | 0 |
| Other water quality treatment schemes | 69 | 46 | 41 | 12 | 5 |
| Schemes to improve the Taste & Odour of water to customers | 15 | 8 | 6 | 6 | 0 |
| Schemes to improve the discolouration of water to customers | 37 | 29 | 18 | 2 | 1 |
| Other schemes to improve the acceptability of water to customers | 9 | 1 | 2 | 3 | 1 |
| Lead Pipe Replacement to meet 10µg/l standard | 16 | 16 | 0 | 0 | 0 |
| TOTAL | 382 | 294 | 213 | 67 | 15 |
Click on supported schemes (in pdf format) to view more details of where and what improvements are proposed.
Programme by Driver - Wales
| Quality Driver | No. of Schemes submitted | No of Schemes given Preliminary Support | No of Schemes (to date) | ||
| Issued with a Letter of Support | Issued with a Letter Declining to Support | Issued with a Withdrawal Letter | |||
| Renovation of the Distribution system | 1 | 1 | 0 | 0 | 0 |
| Nitrate removal treatment | 0 | 0 | 0 | 0 | 0 |
| Pesticide removal treatment | 2 | 2 | 2 | 0 | 0 |
| Trihalomethane reduction treatment | 2 | 0 | 0 | 2 | 0 |
| Turbidity reduction schemes | 1 | 1 | 0 | 0 | 0 |
| Cryptosporidium removal treatment | 0 | 0 | 0 | 0 | 0 |
| Iron/Manganese removal treatment | 0 | 0 | 0 | 0 | 0 |
| Plumbosolvency treatment schemes | 0 | 0 | 0 | 0 | 0 |
| Other water quality treatment schemes | 2 | 2 | 1 | 0 | 0 |
| Schemes to improve the Taste & Odour of water to customers | 5 | 4 | 3 | 1 | 1 |
| Schemes to improve the discolouration of water to customers | 1 | 1 | 1 | 0 | 0 |
| Other schemes to improve the acceptability of water to customers | 1 | 1 | 1 | 0 | 0 |
| Lead Pipe Replacement to meet 10µg/l standard | 1 | 1 | 0 | 0 | 0 |
| TOTAL | 16 | 13 | 8 | 3 | 1 |
Click on supported schemes (in pdf format) to view more details of where and what improvements are proposed.
