Ofwat’s draft decisions published today on green recovery proposals submitted by five water companies will allow them to invest an extra £862 million, on top of their existing five-year PR19 2020-25 investment packages.

The consultation paper sets out how the water sector regulator assessed the proposals, Ofwat’s proposed allowances for each scheme and its proposed arrangements for cost recovery and customer protection.

Under the regulator’s draft decisions Severn Trent Water will invest £565 million, Thames Water will invest up to £146 million, South West Water will invest £81 million, United Utilities will invest £63 million and South Staffs Water will invest £8 million.

The water companies’ customers will not start to pay for the majority of this investment until 2025.

The summary of the utilities investment proposals is as follows:

Severn Trent Water

Severn Trent Water will invest around £565 million, including:

• £169 million to improve river quality by upgrading sewage treatment works, treating and reducing spills from storm overflows, and installing river quality monitoring;
• £140 million to increase water supplies in a low-carbon, reduced-chemical way, through a combination of supply- and demand-side solutions;
• £78 million to trial the creation of two bathing rivers, including reducing harm from storm overflows by reducing spills into the area during the bathing season;
• £76 million to protect homes from flooding through nature-based solutions;
• £75 million to replace and repair customer supply pipes, reducing health risks from lead pipes in two trial areas; and
• £20 million to help customers save water by installing smart water meters – the water company proposes to install 157,000 smart meters (AMI, advanced meter infrastructure technology, enabling near real time data reporting), across Coventry and areas of Warwickshire, that can be monitored remotely on a frequent basis. This would include replacement of 91,000 existing meters and 66,319 new meter installations.

United Utilities

United Utilities will invest around £63 million, including:

• £44 million to improve the river environment by increasing sewer capacity;
• £13 million to develop nature-based solutions through partnership working; and
• £5 million to investigate ways to reduce harm from storm overflows.

South Staffs Water

South Staffs Water will invest £8 million to improve water quality while reducing carbon emissions via a ceramic membrane solution for the Hampton Loade scheme in South Staffs Water's region. Severn Trent Water will contribute an extra £7 million to the project, under existing agreements for the shared resource.

Thames Water

Thames Water will invest up to £146 million to help customers save water by installing smart water meters, including in areas that currently use water from chalk streams. The water company will bring forward its smart metering programme to deliver a maximum of 810,280 additional smart meters.

South West Water

South West Water will invest over £81 million, including:

• £25 million to upgrade the Knapp Mill water treatment works;
• £23 million to increase water supply resilience by supporting water transfers;
• £17 million to trial ways to help customers save water, protect customers from the costs of supply pipe failures, and reducing health risks from lead pipes – this includes the installation of 76,000 smart meters;
• £9 million to use nature-based solutions to reduce flood risk and enhance natural habitats; and
• £7 million to reduce harm from storm overflows and improve river quality.

Deadline to submit responses commenting on Ofwat’s consultation on its draft decisions on the water companies’ proposals is midday on Wednesday 9 June. Click here to download the consultation paper.

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