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Water supplies secure as customers and industry save millions of litres a day

Water supplies secure as customers and industry save millions of litres a day

WATER SERVICES REGULATION AUTHORITY News Release (PN 35/07) issued by The Government News Network on 16 October 2007

Customers can be assured that their water supplies are secure, according to Ofwat's 'Security of Supply 2006-07' report published today.

The report looks at how well companies have managed to balance their supply of water against the demand by their customers in a way that ensures they meet their customers' needs for a safe, secure and continuous water supply now and in the future.

During the year covered by the report, water companies and their customers achieved water savings of 65 million litres (M/l) a day - equivalent to the consumption of nearly 440,000 people or a city almost the size of Bradford.

Voluntary water efficiency targets introduced by Ofwat will help the companies to continue to build on this success.

Ofwat Chief Executive, Regina Finn said: "The focus by customers and companies on using water wisely is very important when companies are calculating how much water their customers will need over time and planning to find the water resources to meet that need."

Across the whole industry, leakage fell for the third consecutive year and the amount of water lost through leakage is now one-third lower than its 1994 peak.

"This is another key piece in the jigsaw of ensuring water supplies are secure", said Regina Finn. "It is an area where companies can show their customers that they are managing the delivery of water efficiently."

Only Severn Trent failed to meet its leakage target and the company has given Ofwat a legally binding undertaking to fix this and meet future targets. Following similar action against Thames Water last year, the company complied with its commitments in 2006-07 and beat its leakage target by 20 Ml/d.

Overall, the report shows that many companies are on course to deliver the improvements that they promised to make sure they have sufficient supplies to meet their customers' needs. But there are some concerns that a few companies are not hitting targets the regulator expected them to meet in the 2005-10 price review period.

"We will monitor those companies closely", said Regina Finn. "And as we did with those missing leakage targets, we will take the action necessary to make sure they meet their customers' needs."

Notes to Editors:

1. The Water Services Regulation Authority (Ofwat) is the economic regulator of water and sewerage companies in England and Wales. It exercises its powers in a way that it judges will protect the interests of consumers, promote value and safeguard future water and sewerage services by allowing efficient companies to carry out their functions properly, and to finance them.

2. The security of a company's supply indicates the likelihood of its customers facing restrictions on water use more often than is planned. A maximum security of supply index score means a company should not need to impose such restrictions more frequently, on average, than its planned level of service. Lower scores mean that restrictions on use will be needed more frequently, on average, than the planned level of service for some of the company's customers.

3. The 'Security of Supply 2006-07' report covers performance up to March 2007. It looks at how companies are delivering their long-term plans to balance supply and demand for water. It also includes information about leakage and water efficiency.

4. In August 2007, Ofwat set interim voluntary water efficiency output targets for each company for 2008-09 and 2009-10. These will help the regulator to gather evidence on how targets work, how it can calculate them in a meaningful way, and how they can provide incentives for each water company to promote an economic level of water efficiency among consumers. Ofwat will continue to work with companies and the Environment Agency on the further development of targets.

5. Severn Trent Water's target was to reduce leakage by 17 Ml/d. Leakage did fall by 9 Ml/d but the company missed its leakage target by 8Ml/d.

6. Ofwat has written to Dwr Cymru Water, Three Valleys Water and South East Water expressing their concerns and emphasising that we expect them to deliver the outputs they forecast by the end of 2009-10. Despite the fact that Dwr Cymru and Three Valleys have improved their planned level of service banding, Dwr Cymru is still behind its forecast score for both scenarios and Three Valleys is behind on its critical period profile. South East is also behind on both its planned level of service and critical period profiles.

7. Summer last year saw one of the worst droughts in living memory continue and seven water companies in south-east England responded by restricting their customers' water use during the height of the drought. These were: Sutton & East Surrey Water, Southern Water, South East Water, Mid Kent Water, Folkestone & Dover Water, Thames Water and Three Valleys Water.

8. Ml/d = A megalitre is equal to one million litres. Ml/d refers to megalitres per day.

9. Ofwat announced its enforcement action on Severn Trent on 9 August 2007. See PN 27/07 for more details.

10. Ofwat announced its enforcement action on Thames Water on 4 July 2006. See PN 19/06 for more details.

11. The 'Security of Supply 2006-07 report' is available on the Ofwat website, http://www.ofwat.gov.uk.

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