1. business and industrial
2. business operations
3. business plans

Our draft
five-year plan
2015 – 2020
2 | Our draft five-year plan 2015 - 2020
Introduction
This document provides a summary of the work we
believe is required between 2015 and 2020 to ensure we
continue to provide high-quality water and sewerage
services across London and the Thames Valley. In early December we will, like all water
companies, present our business plan to
the economic regulator, Ofwat. They will
examine our plan to ensure it reflects the
needs of customers, and then set limits
for the bills we will charge in that five-year
period.
Before we finalise and submit that plan we
want to know what you think. So whether
you are a domestic or business customer,
whether you are replying individually or on
behalf of an organisation, we hope you will
read this document and let us have your
comments.
The last year has provided ample
reminders of the range of challenges
we can face in maintaining high-quality
services. After the driest two-year period
on record there was a real threat of
drought in spring 2012, with the need to
impose restrictions on water use. This was
followed immediately by many months
of particularly heavy rain, with last year
ending up as one of the wettest years ever
in our region and leading to instances of
sewer flooding.
We set out to provide the best possible
service to our customers, and to protect the
environment, regardless of the weather.
To do that, with appropriate allowance
for population growth, we have a number
of key tasks. They include maintaining
and extending our existing pipe networks
and treatment plants, planning carefully
to store and conserve water, encouraging
customers to use water wisely, and
ensuring our sewers can cope as well as
possible with heavy rainfall.
In drawing up our plans for the next five
years, we have been acutely aware of
the need for our bills to be affordable.
We know, of course, that the economic
downturn continues to impact household
budgets. On top of this, our sewerage
charges will rise to fund the building of the
Thames Tideway Tunnel. This is a huge
sewer project that has to be delivered.
Without it, our region’s biggest river
will carry on being polluted at frequent
intervals, which is why the Government
has included the tunnel in the National
Infrastructure Plan.
To see how our plans
could affect your bill,
please see pages 28 and 29.
The requirement to fund the building of
the Thames Tideway Tunnel has given
extra emphasis to the need to keep
down the costs of everything else we
do. This has included getting the best
possible performance out of our existing
equipment, while maintaining at least the
current levels of service. But we have also
challenged ourselves to think differently
about how we approach our work.
By making efficiencies and through
innovation, we have found less expensive
ways to maintain or improve some of our
services. This has included exploring new
solutions like sustainable drainage and
maximising the energy we generate from
sewage.
Through these and other measures we
can maintain our overall performance,
and improve it where necessary, while
keeping bills as low as possible. We intend
to continue to take that approach in
delivering the five-year plan outlined in the
following pages.
This document begins by outlining some
of the main things customers have told
us in our recent discussions, and how we
have developed these into our long-term
objectives.
We go on to outline our proposals in eight
main areas of our work. In each case, we
give more detail on feedback we have
received, challenges we face and our
recent performance. We then describe our
five-year plan in more detail, indicating the
potential cost impact on an average bill.
Our draft five-year plan 2015 - 2020 | 3
The final section focuses on how much our
proposals could cost in total – we currently
estimate an average bill of £370 by
2019/2020. See pages 28 and 29 for the
additional impact of the Thames Tideway
Tunnel. (Please note that if you receive
only sewerage services from us, then only
our wastewater plans will affect your bill.
The total will depend on your water supply
company’s spending plans.)
Although this document concentrates on
the 2015 to 2020 period covered by our
business plan, we also need to show you
how that fits into our long-term thinking.
Pages 30 and 31 give an overview of our
strategy for the next 25 years.
You can find more details on this, and on
the separate consultation we are running
on how we ensure we have enough
water over this longer period, at www.
thameswater.co.uk/consultations. If
you would like a paper copy of either
document, please call 0808 178 9055.
We will publish our final plan – informed by
the views you give us in this consultation –
near the end of the year, when we present
it to Ofwat.
Thank you for your interest in our
proposals. Page 32 describes a variety of
ways by which you can let us know your
views.
Martin Baggs
Chief Executive Officer
Our plan for 2015 to 2020
includes the following key targets:
• Reduce leakage from around 665 million litres per day
to 620.
• Install 500,000 water meters, increasing the proportion of
homes with a meter from 30 per cent to 56 per cent.
• Strive to achieve 100 per cent compliance with stringent
UK and European drinking water quality standards.
• Encourage and assist customers to use water wisely,
reducing the average amount each person uses per day
from 161 to 153 litres.
• Meet all project milestones for the Thames Tideway
Tunnel, due for completion in 2023.
• Aim for treated effluent to be 100 per cent compliance
with licence conditions at our sewage works.
• Remove 2,100 homes from the risk of sewer flooding.
• Aim to meet government targets to reduce carbon
emissions to 34 per cent below our 1990 level.
• Introduce a social tariff to help households who
most struggle to pay.
• Improve our IT systems to enable online account
management.
4 | Our draft five-year plan 2015 - 2020
Our research
so far
Since forming our last five-year plan, we have carried out a wide
range of research to find out what customers really value about our
service and what they think we should focus on.
Among our studies, we have held focus
groups, online and telephone surveys and
in-depth interviews. In total, we have
spoken to more than 10,000 customers,
plus stakeholders and business customers.
In putting together the current document,
we have been sharing our proposals with
an independent Customer Challenge
Group. Members include regulators
and representatives from business, local
government and such organisations as Age
UK and the Consumer Council for Water.
Their role is to ensure that the views of our
customers have been properly considered
by scrutinising our plans and how we have
formed them.
We’ve spoken to thousands
of people to find out their
views. Here are some of the
things they’ve told us:
The group hold regular meetings to check
the detail of our proposals – including
our long-term strategy – and that we are
testing these against customers’ views.
We are the UK’s largest water and sewerage company. As part of our work we:
2.6 billion litres
•
of drinking water per day to 9 million
Treat and supply
people. Its quality is among the best in the UK. For each of the last five years, at least
99.97 per cent of samples have met stringent UK and European standards.
•
•
Transport and treat
of sewage per day for 14 million people.
Maintain a pipe network that, if laid end to end, would stretch more than three times
round the world.
•
Create enough
during the sewage treatment process to
meet about 12 per cent of our own power needs.
•
Answer
4 billion litres
renewable energy
4 million calls and 575,000 written enquiries per year.
Water is an essential
service, and the
resource must be
treated with care to
safeguard both
people and the
environment.
Bicester
Swindon
Customers are at the
sharp end and know
what they are talking
about.
Swindon
Our draft five-year plan 2015 - 2020 | 5
You need to inspire
your customers to
work with you to
reduce water use.
Install more meters,
because no one will
save water if they
pay a flat rate.
Wallingford
People want to be
able to contact
Thames Water
effortlessly.
Amersham
Banbury
Islington
Creating renewable
energy is important
for the future.
Stevenage
Hackney
Oxford
Slough
LONDON
Dartford
Reading
Newbury
We cannot be
pumping raw sewage
into the Thames …
every time there is a
downpour.
Brentford
Basingstoke
Reigate
Leakage is the
only thing you
really need to
focus on.
Slough
Godalming
Reducing leaks and
responding quickly when
they are reported … will
help to alleviate future
water shortages.
The elephant in the
room … [is] the critical
influence of a growing
population.
Newbury
Reading
Thames Water provides water and
sewerage services in this area
Thames Water provides sewerage but
not water services in this area
6 | Our draft five-year plan 2015 - 2020
Our performance
against our current
five-year plan (2010-2015)
Target
Maintain our pipes, pumping stations and
treatment works
On track to
Progress by 31 March 2013
deliver target
by 31 March
2015?

Balance water use with available supply
Maintain leakage at a cost-effective level
We have invested heavily to maintain the condition of our pipes
and equipment.
We have invested in new sources of water, reduced leakage and
promoted the wise use of water by our customers.

We have met our leakage target for seven years running.
Promote the wise use of water by our
customers
We are on track to achieve our water efficiency target of 22 million
litres per day, and our target to save 6 million litres per day through
metering.
Maintain excellent levels of water quality
The quality of the water we supply remains among the best in the
industry.
Maintain our sewers, pumping stations and
sewage treatment works
?
The performance of our sewers has temporarily declined, resulting
in more homes being flooded by our sewers. We are working hard to
resolve this problem.
Provide additional treatment capacity to cope
with an additional 146,000 people

So far we made improvements to our sewage works to enable them
to treat sewage from an extra 100,000 people.
Reduce the number of properties on the ‘high
risk’ flooding register by 497
We have reduced the overall size of the register by 200 properties
and have plans in place to make the remaining net reduction of
300 properties.
Reduce odour from nine sewage works
So far we have made improvements at six works.
Original targets have since been superseded
by a new Ofwat measure that focuses on
improving customer satisfaction.
We have reduced written complaints and abandoned calls in
2012/13. We have also redesigned our bills to make them easier to
understand and introduced a new system that captures customer
feedback on our service.
Our draft five-year plan 2015 - 2020 | 7
Our long-term
priorities
In starting to form our plans for the five years to 2020 and
beyond, we need to define the outcomes we will deliver.
These are the basic long-term services
and benefits we aim to provide for our
customers and they form the basis of the
measurable objectives in our five-year plan.
We will provide a safe and reliable water and sewerage service
that complies with all necessary standards and is available when
our customers require it.
In line with the general
feedback from customers
in recent months, we are
proposing five outcomes:
We will demonstrate to our customers and stakeholders that they
can trust us, that we are easy to do business with and that we
care.
We will provide the level of service our customers require, in the
most economic and efficient manner, to ensure their bills are no
more than necessary.
We will limit our impact on the environment, to achieve a socially
responsible and sustainable business for future generations.
We will seek to offer our customers choices as to what services
they use, how and when – such as how to get in touch, how we
bill them and how they pay.
How far do you agree or disagree
that these outcomes are the ones
we should focus on?
8 | Our draft five-year plan 2015 - 2020
The Thames
Tideway Tunnel
The Thames Tideway Tunnel will help tackle the
growing problem of pollution affecting the tidal
River Thames.
Any balanced appraisal of our plan has to
start with an explanation of the Thames
Tideway Tunnel. This is an immense project
that forms part of the Government’s
National Infrastructure Plan and has to be
delivered.
The preferred delivery mechanism will
see much of the work undertaken by a
separate company, set up specifically for
that purpose and with its own licence from
Ofwat. However, under current plans, all
of the necessary costs will be borne by
wastewater customers in the Thames
Water area. It is therefore essential that
we take into account the full impact of the
project in our planning.
The tunnel is required because London has
outgrown its sewer system. After as little
as two millimetres of rainfall the sewers
overflow into the tidal River Thames. These
discharges have been getting steadily
worse and now happen on average once a
week. Every year, many millions of tonnes
of sewage pollute the river in London,
causing an environmental and public
health hazard.
The Thames Tideway Tunnel will capture
the vast majority of these discharges and
transfer the sewage to our Beckton works
in east London. There the sewage will be
treated in the normal way, with renewable
energy generated from the solid matter
and clean water returned to the river.
Together with other projects already under
way, the Thames Tideway Tunnel will tackle
the problem of sewer overflows to the tidal
Thames for at least the next 100 years,
and enable the UK to meet European
environmental standards.
The estimated cost of building the Thames
Tideway Tunnel is £4.1 billion (excluding
inflation). The exact impact on bills is not
yet known, but will increase as the work
progresses. The project is estimated to
add a maximum of £70 to £80 to the
average annual wastewater bill paid
by our customers by the early 2020s.
These figures are all at 2011 prices. The
Government and our economic regulator,
Ofwat, will continue to scrutinise all the
costs of the project to ensure these are
kept as low as possible.
We have already discussed the Thames
Tideway Tunnel and how it is built with a
wide range of customers and stakeholders.
For more details, visit www.thameswater.
co.uk/londontidewayimprovements.
Our
Our draft
draft five-year
five year plan 2015 - 2020 | 9
This work could cost
a maximum of
£70 to £80 per year
(excluding inflation) in an average
annual household wastewater bill
by the early 2020s.
For more details, see pages 28 and 29.
10 | Our draft five-year plan 2015 - 2020
Our plans for this part of our
business link to the above
outcomes (see page 7).
There when you
need us
It’s our job to ensure you can contact us in the way you want and, if
things go wrong, that you don’t need to get in touch more than once.
We aim to provide a top-level service whether you call us, write to us
or use the range of services on our website.
What you’ve told us
The main themes from your feedback,
including research and comments to our
call centres, are:
• You want us to get it right first time, so
you don’t have to contact us more than
once about an issue.
• We should keep our promises – for
example, by keeping to agreed times.
• We need to keep you up to date when
we are dealing with issues you have
raised.
• You want us to resolve your issues more
promptly.
Challenges
• Customers are in general broadly
content with the service we provide, but
some of those who needed to contact
us in 2012 did not receive a satisfactory
level of service. Action is being taken to
improve this situation.
• Expectations are changing, particularly
when it comes to the use of online
technology for quick and convenient
communications.
Progress so far
• We have launched a new feedback
system, which gives customers a simple
way to rate our service, and enables
us to respond swiftly if needed. About
100,000 customers have so far given a
rating.
• We have introduced SMS texting to
update people on major service issues.
• We have redesigned our bills to make
them easier to understand. They
include a better explanation of our
calculations, plus simpler details on
ways to pay and get in touch, and have
been well received by customers.
• We have increased levels of spend on
operational activities and customer
service centres, and are seeing
improvements in the level of service,
but there is more that needs to be
done. New telephone systems, from
2014, are expected to enable further
significant improvements.
What we’re planning
Our focus in the coming years will be on
ensuring we provide the basics of customer
service excellently and get things right first
time, so you only need to call us once.
We want you to be able to contact us
easily, in the way you prefer. We will make
it simpler to access and use our services,
offering a variety of ways to get in touch.
While we recognise there are many people
who still want to communicate with us by
phone or letter, many increasingly expect
to deal with us online.
We plan to make big improvements to our
IT systems, so that it is easier for you to
update us. This will mean you will be able
to log in to your account and view all your
details in one place, accessing your bill and
telling us about anything from updated
bank details to a new home address. If you
have a meter, you will also be able to see
how much water you have used. Our staff
will have a full overview of this information,
so they can help you more easily and
quickly.
We also aim to make continuous
improvements, through monitoring the
quality of our work and routinely asking for
feedback, so that we learn from mistakes
and can coach our staff to improve
performance. We recently began inviting
customers to text us a rating of how happy
they were with our service. This helps us
assess our performance and call back if
someone is dissatisfied. We intend to
continue asking for feedback in this way.
If things go wrong, we want to make sure
we fix them in a timely way. That’s why we
are proposing improvements to our target
times for addressing typical problems,
shown on the opposite page.
Our draft five-year plan 2015 - 2020 | 11
Our plans to install ‘smart’ water meters,
which we can read remotely, will improve
the accuracy of bills by reducing the
number of estimates and help you to
monitor your own water use.
We will continue providing extra services
to help vulnerable customers and those
with special needs. These include coloured
background bills for dyslexic customers
and email bills for blind customers who use
screen reading software. We also have a
special mobile telephone number which
deaf customers can text in an emergency.
We have asked customers’ views on our
current service and their priorities for
improvement. As part of this ongoing
research, we are asking people if they
agree with the following proposed
changes:
• Investigate leaks we are told about
within two working days and fix them
within five, as opposed to the current
level of three and 15 working days
respectively.
• Respond to letters or emails about
water or sewerage services within five
working days, instead of the current
maximum of 10.
• Provide appointment slots for visits on
weekday evenings and on Saturdays.
• Give people a two-hour appointment
slot, instead of saying we will attend in
either the morning or afternoon.
• Attend within two hours, instead of
four, to tackle severe sewer blockages
which are affecting toilets, sinks or
showers.
• Offer a discount – not currently
available – for customers using our live
online account management service,
who also opt for online paperless billing
and pay by Direct Debit.
£20
This work could cost
per year (excluding inflation) in an
average household bill in 2019/20.
For more details, see pages 28 and 29.
How far do you believe our plans
will improve the service received
by customers?
12 | Our draft five-year plan 2015 - 2020
Our plans for this part of our
business link to the above
outcomes (see page 7).
Affordable bills
Meeting the challenges we face will put an upward pressure on the
cost of our services. We need to ensure bills remain affordable, at a
time when household budgets are already under stress.
What you’ve told us
• You want us to keep bills affordable.
• Many of you point out that the
economic downturn means that paying
bills, including water bills, is already a
struggle.
• Many of you would accept a small rise
in your bill to help those in genuine
difficulties.
Challenges
• We have to balance the affordability
of our bills in the short term against
the risk of deferring essential work that
could cost more in the long run.
• The Thames Tideway Tunnel will add
to the wastewater bill paid by our
customers.
• The failure of some household
customers to pay their bills adds £11
to the average water bill. This problem
has been getting worse over the last
three years and shows no sign of
improvement, despite strenuous efforts
to recover debts.
Progress so far
• Our current average bill is one of the
lowest in the UK – £354 per year, or
97p per day. This is the second lowest
of the major water and sewerage
companies in England and Wales.
• Our Customer Assistance Fund made
donations totalling £2.1 million in
2012/13.
• More than 29,000 households opted
to have a free water meter fitted in
2012/13. This can help to budget and
save money.
This significant increase, which is both
essential and inescapable, means we need
to keep charges to fund other parts of our
work as low as we possibly can, without
damaging the service we provide, or
building up problems for the future.
What we’re planning
The state of the UK economy has put
pressure on many customers’ ability to pay
water bills at the current level. We know
that any increase will make this problem
worse.
We will continue to offer the statutory
WaterSure tariff, which caps the bill of
qualifying metered customers at our
average charge.* However, fewer than
6,000 customers pay in this way, and we
will better promote the scheme to increase
take-up.
The Thames Tideway Tunnel will become
a significant additional cost for our
wastewater customers, although the bill
impact for each year is not yet known. It
is estimated to add a maximum of £70 to
£80 to the average annual wastewater bill
(at 2011 prices) by the early 2020s.
We plan to keep bills as affordable as
possible by working efficiently, helping
those customers who genuinely struggle
to pay their bills, and doing more to ensure
that all of those who can afford to pay us
do so.
We propose to introduce a social tariff
from 2015. This will use a small increase
in bills for the majority of customers
to reduce charges for those who most
struggle to pay. At the time of writing,
we are exploring a range of options for
this change, which we expect will assist a
relatively small number of customers.
*This tariff is available to households where
someone receives a state benefit and has
three or more children, or a medical condition
requiring extra water use.
Our draft five year plan 2015 - 2020 | 13
We will continue to make donations
towards qualifying customers’ arrears
through our Customer Assistance Fund,
to help them better manage their future
payments.
We will also maintain the Thames Water
Trust Fund, run by a board of independent
trustees. This makes annual donations
to support debt advisors in organisations
such as local Citizens Advice Bureaux, and
provides special payments to customers in
extreme hardship.
Our plans also include helping customers
reduce their bills by providing free watersaving devices and advice. This will
be available to all our customers, but
particularly targeted at people on low
incomes and those households included in
our metering programme.
A small but growing proportion of
household customers could pay us but fail
to do so, which adds £11 to everyone else’s
bill. We need to work harder to tackle this.
One way we will do so is by understanding
more about the types of customer who
don’t pay. This will help us take the right
actions to encourage them to settle their
bills.
£11
Bad debt could cost
per year (excluding inflation) in an
average household bill in 2019/20.
For more details, see pages 28 and 29.
How far do you agree or disagree that the plans
we have considered are the correct ones that we
should follow?
14 | Our draft five-year plan 2015 - 2020
Our plans for this part of our
business link to the above
outcomes (see page 7).
Making sure there’s
enough water to go round
A growing population and the effects of climate change will increase the
amount of water we need to ensure sufficient supplies for everyone’s needs.
It’s vital that we work hard to ensure water isn’t wasted, which includes finding
and fixing leaks.
What you’ve told us
• You see investing to reduce leaks as a
high priority. It is also your top concern
in ensuring there are sufficient supplies
for everyone.
• You look to us to set an example in
using water responsibly.
• You want information on how to use
water wisely.
Progress so far
• We have reduced leakage year on year,
beating our last seven annual targets.
Leakage is now 26 per cent lower than
in 2005.
• In 2010 we opened the UK’s first
large-scale desalination plant. In times
of drought, we can now take supplies
from the tidal Thames and remove the
salt to create up to 150 million litres of
drinking water per day.
• We are working in partnership with
other organisations to run the UK’s
first single-town water conservation
campaign, Save Water Swindon. It
aims to cut usage by one million litres
per day by 2014.
Challenges
• Forecasts suggest the number of
people we supply will increase from
9 million today to 10.4 million by 2040.
• Climate change is predicted to reduce
summer rainfall. As part of this, the
frequency and severity of droughts
could increase.
• Environmental requirements could
reduce the amount we can take from
rivers by 250 million litres per day –
nearly 10 per cent less than today.
• People in our region each use on
average 161 litres per day – about 10
litres above the UK average.
What we’re planning
The prompt repair of leaks is understandably one of the things customers feel
most strongly about. We have reduced
leakage to its lowest-ever level, but know
we have much more work to do.
The vast majority of leaks are hidden
underground, so aren’t visible on the
surface. Finding and fixing some of them
can therefore be difficult.
About a quarter of all leaks are from
customer-owned supply pipes, which link
our water mains to individual properties.
We previously provided a subsidised repair
service for customers’ pipes, but are now
relaying pipes and fixing leaks for no
We are also seeking views on our
25-year Water Resources Management Plan.
For more details, visit www.thameswater.co.uk/haveyoursay
additional charge. This aims to encourage
householders to agree to the work, so that
we can reduce leakage.
We aim to continue to reduce leakage. We
anticipate our leakage level will be around
665 million litres per day by 2015, and aim
to reduce this to 620 million litres per day
by 2020. We will do this partly by replacing
water mains and improving the way we run
our supply network.
We will also reduce the amount of water
we use as part of the treatment process, to
cool or clean equipment. Both approaches
will help limit how much we need to take
from rivers and other sources.
Another way we will make improvements
is by better targeting leaks. This will be
helped by our plans to start progressively
metering all domestic and business
properties, with the ultimate aim that
nearly all will have a meter.
Metering is an important part of our plans
to help control demand for water and
target leakage more effectively, as it will
help people become more aware of how
much they use. Fitting a meter tends to
reduce the amount our customers consume
by on average 12 per cent. This is because
they pay for exactly what they use and
because we can better detect leaks from
customers’ pipework.
Our draft five-year plan 2015 - 2020 | 15
In conjunction with our metering
programme, we also intend to offer to
fit water-saving equipment in newlymetered homes. We will help businesses
by continuing to provide water efficiency
‘audits’, in which we advise them how they
could make changes to their premises to
save water.
Meters also help pinpoint leaks from
our own pipes, as they show where
unexpectedly high volumes of water are
passing through the supply network.
We will install 500,000 meters by 2020,
increasing the proportion of households
with a meter from the current level of
about 30 per cent to 56 per cent by 2020.
There are some properties where current
technology is unable to isolate individual
supplies. We expect therefore to be able to
meter 78 per cent of properties by 2040.
However, we aim to meter nearly all
buildings thanks to bulk meters, which
measure the total volume entering the
premises. In one case in central London, a
bulk meter showed 100,000 litres per day
was being wasted through corroded joints.
To help households who might see their bill
rise once they have a meter, we will wait
two years before we start billing them on
the basis of their meter reading. In the
meantime, we will show them what their
bill would have been if they paid in this
way. Households will be able to switch to
metered payments immediately if they
wish.
The meters we install will be new ‘smart’
models, which give customers more ways
to monitor how much they are using.
Fitting meters will also enable us to trial
new price bands, which could help reduce
demand for water. One system could vary
the price depending on the season, making
water more expensive in the summer, when
there is typically less available. Another
could introduce usage bands, where people
would pay a higher unit price if they used
more than a certain volume of water. We
plan to pilot both types of price band, to
test customer reactions before deciding
whether we should introduce them beyond
2020.
It will also be important to continue
to show customers how they can help
conserve supplies. We will continue to
promote simple tips and water-saving
devices and develop new water efficiency
partnerships with other organisations. Our
aim will be to reduce the average amount
customers in our region use per day from
161 to 153 litres.
We have to plan for the long term, to
ensure there is enough water for our
region in years to come. (See footnote on
page 14 for our separate water resources
consultation.) Long-term predictions
suggest we will need a major new source of
water by the late 2020s, and that this is an
issue which also affects the wider SouthEast area. Potential solutions will take a
long time to plan and implement. We
therefore need to work with stakeholders,
regulators and other water companies over
the next five years to agree on the best
course of action.
One possibility is ‘wastewater recycling’.
This process is already common practice
in many parts of the world. It involves
putting treated effluent from a sewage
works through a further process which
would allow the water to be returned to
a river at higher than usual quality and
pumped out again downstream. It can
then be treated to drinking water standards
and put back into supply, rather than lost
to the sea. We need to carry out further
research into this approach, and will be
doing so over the next five years.
Other potential solutions which we will be
examining closely include a new storage
reservoir and transfer schemes to bring
water from other parts of the country.
£26
This work could cost
per year (excluding inflation) in an
average household bill in 2019/20.
For more details, see pages 28 and 29.
How far do you agree or disagree
that our plans to manage the
demand and supply of water are
the right ones to follow?
16 | Our draft five-year plan 2015 - 2020
Getting good-quality
water to your tap
Our plans for this part of our
business link to the above
outcomes (see page 7).
We need to invest to ensure our water mains are in good
shape and provide a reliable supply for the 9 million people
we serve. And we want to ensure the quality of our water
remains among the best in the UK.
What you’ve told us
• The safety, quality and reliability of
water supplies are a priority.
• You see long interruptions to supply as
the worst failure in our service.
• Supply interruptions are the most
common water-related reasons for
customers contacting us.
Progress so far
• For each of the last five years, between
99.97 and 99.99 per cent of our tap
water samples met stringent UK and
European quality standards – among
the best in the UK.
• We have replaced more than 2,200
kilometres (1,400 miles) of old and
leaky mains since our leakage level was
at its peak in 2004.
• We have been working with local
farmers to find ways to reduce pesticide
run-off from fields into rivers. This
reduces the cost of treating the water
to drinking water standards.
Challenges
• Some of our equipment is still working
well but reaching the end of its life, so
costs more to maintain.
• Energy costs are rising steeply. The
cost of electricity could be 40 per cent
higher in real terms by 2030.
• London’s growing population means
we must ensure our treatment works
consistently operate to optimum
capacity. To do this, we must carry out
improvements, while maintaining highquality supplies.
What we’re planning
We will improve the reliability of supplies
by replacing at least 600 kilometres (372
miles) of mains with a significant history
of bursts, leaks and knock-on effects to
supplies. Most of this is likely to be in
London, particularly the north-west of the
capital, where the problems are worst.
To ensure we get the maximum benefit
from this investment, we will improve
our targeting techniques, rather than
automatically replacing whole areas of
mains. In line with the findings of an
independent review, we will fit meters
in local properties and pipework before
replacing pipes. This will enable us to check
whether high demand for water in an area
is caused by leaks or by genuine usage.
We will better monitor our ‘trunk mains’.
These large pipes, which form the arteries
of our supply network and operate at high
pressure, cause major disruption when
they occasionally burst. We aim to better
predict when they start to leak, so we can
step in and repair them.
We will also improve monitoring of our
water treatment processes so we can
better judge when and where we need to
make improvements.
Our plans include continuing with work to
control the fluctuations in pressure that
can, in some areas, cause leaks and bursts.
We realise the difficulties low pressure can
cause, and will also work to reduce this
problem.
We are very aware that our repair work
can disrupt supplies while we temporarily
close sections of pipe. We are increasingly
aiming to use new tools and techniques
to isolate shorter sections of mains we
are working on. Instead of shutting off
hundreds of homes, this can decrease the
number to a handful, or none at all.
New regulations to be introduced later
this year will further reduce the already
very low level of lead permitted in water
supplies. We will expand our programme
of lead protection to more treatment works
outside London. This process coats the
inside of lead pipes with a protective layer,
stopping lead from leaching into the water.
We will continue to replace lead pipes in
areas where this remains an issue and
which are at highest risk of exceeding the
new limit.
Our draft five year plan 2015 - 2020 | 17
Our overall aim remains the achievement
of 100 per cent compliance with the
stringent UK and European drinking water
quality standards.
The quality of supplies is strongly linked
to the purity of the sources from which
we take untreated water. Pesticides are
sometimes present in rivers and boreholes.
They are expensive and difficult to remove
at a treatment works, and we have been
working to find ways to stop them entering
water sources in the first place.
This approach, called ‘catchment
management’, involves a range of
approaches to prevent pollution at source,
reducing the likelihood of contaminants
running into watercourses. These may
include introducing landscaping features,
such as drainage, or giving guidance on the
use of potentially problematic substances
– for example, by advising farmers on the
application of pesticides.
We will widen this work in the next five
years, having identified the best parts
of our region on which to focus our
efforts. We may eventually have to work
with manufacturers to encourage more
environmentally friendly products.
£86
This work could cost
per year (excluding inflation) in an
average household bill in 2019/20.
For more details, see pages 28 and 29.
How far do you agree or disagree
that our plans to supply customers
with good-quality water are the
right ones to follow?
18 | Our draft five-year plan 2015 - 2020
Our plans for this part of our
business link to the above
outcomes (see page 7).
Running a reliable
sewerage service
Our huge sewer network drains an area in which 14 million
people live and work. We need to ensure it provides the
service required, and that we minimise blockages and
sewer flooding.
What you’ve told us
• You see preventing sewer flooding in
properties as a priority.
• When you contact us about a sewagerelated issue, nearly 50 per cent of
telephone calls and about 20 per
cent of written complaints are about
blockages.
Challenges
• Climate change could increase the
intensity of rainfall. As a significant
proportion of our sewers are combined
– taking foul waste and rainfall – this
increases the risk of sewer flooding.
• The concreting over of green spaces,
particularly in London, means
increasingly that rainfall cannot drain
away naturally. It runs into our sewers,
which can fill them to capacity.
• New legislation means that by October
2016 we will take responsibility for an
estimated 5,000 sewage pumping
stations which are currently privately
owned. We also need to better
understand the condition of nearly
25,000 miles of privately-owned sewers
which we were required to take over in
2011.
• In some areas, our service is affected
when groundwater finds its way into
our sewers following prolonged rainfall.
*This is a storm that would be expected to
occur, on average, once in any 30-year period.
Progress so far
• Since 2010 we have increased the
capacity of sewers to prevent sewer
flooding after heavy rain at 277 homes.
• In the same period, we have replaced
70 kilometres (44 miles) of worn-out
sewer.
• Each year we clear about 55,000
blockages from our sewers to try to
prevent flooding, and complete over
1,000 repairs.
What we’re planning
We will continue working to reduce
the number of homes at risk of sewer
flooding, which is a horrible experience
and something we want to reduce to the
absolute minimum. We are changing
the criteria we have traditionally used
to decide where we should carry out
engineering work to reduce this risk. In
the past, we have considered factors such
as rainfall patterns. From now on, we will
instead be guided by the frequency and
severity of past flooding cases, ensuring
we tackle the most urgent cases first.
We plan to solve this problem for 400
households at risk of internal flooding,
protecting them from a one-in-30-year
storm*.
External flooding can be very distressing
too. In the worst cases, flood water
containing sewage can entirely surround
a property. Again, we will look to solve the
most urgent cases first.
Our plans include better analysing
where high groundwater levels, caused
by prolonged rainfall, could infiltrate our
sewers, so that we can work to prevent this.
Our biggest project to reduce sewer
flooding will be in the boroughs of
Kensington & Chelsea and Hammersmith
& Fulham. Over the years, a loss of
natural watercourses and green spaces
has increased the risk of flooding to local
homes. Our plan includes an engineering
scheme to reduce this problem for around
1,700 properties.
The more rainfall runs into our sewers,
the quicker they fill to capacity, which
can lead to flooding problems. This is a
particular issue in areas where the system
is combined, allowing foul sewage to
mix with rainwater. Heavy rain can also
overwhelm sewage works. When this
happens, the sites are sometimes forced to
discharge diluted, but untreated, sewage to
a local river or stream, potentially causing
environmental damage.
Our draft five-year plan 2015 - 2020 | 19
Where properties flood because of
operational issues, we will aim to make
sure that we fix problems first time. For
example, when we are asked to clear a
blockage, we will repair any minor structural
damage that could lead to the blockage
happening again.
Wastewater is carried through many of our
sewers by gravity, but we still need ‘sewage
pumping stations’ in many places to move
it on its way. By October 2016, legislation
will require us to take responsibility for
an estimated 5,000 of these, currently
in private ownership. This will treble the
number we already own and maintain.
That’s why we want to make sure that, as
much as possible, sewers are used only for
foul sewage. We aim to significantly reduce
the amount of rainwater entering them,
or prolong the time it takes. To help tackle
this, we will work in partnership with the
Environment Agency and local authorities
to promote and install sustainable drainage
systems (SuDS). These encourage rain to
soak into the soil, rather than run into our
sewers – examples include grassed roofs
and porous paving. This is much more
difficult to achieve in densely developed
urban areas, such as central London.
Three streets in west London have already
been identified for a pilot scheme we are
funding in partnership with the Greater
London Authority.
We intend to continue working with
developers to encourage them to include
sustainable drainage wherever possible,
and with local authorities to incorporate
this approach within existing drainage
systems for buildings and highways.
We also plan to investigate the sort of
incentives needed to encourage private
landowners to change their drainage in this
way.
We have had encouraging results from
a trial in Bexley, where we highlighted to
residents how they could help prevent
existing problems with blocked sewers.
But we need to find ways to do this across
a wider area, and that keep the issue in
people’s minds for the long term. We
will target places where there is likely to
be a problem, such as those with a high
proportion of fast food outlets.
We also need to extend and improve our
communications with customers about the
problems caused by disposing of unsuitable
items down the drain. Wet wipes, fat, oil
and sanitary items often form blockages
and cause flooding. We need to warn
people about this, and encourage them to
put these materials in the bin, not down
the sink or toilet.
We know a number of these private
pumping stations are in a poor state of
repair, and are therefore planning work to
bring the sites up to a safe and serviceable
standard. This will ensure they provide a
reliable service and pose no safety risk to
our staff or local residents.
£82
This work could cost
per year (excluding inflation) in an
average household bill in 2019/20.
For more details, see pages 28 and 29.
How far do you agree or disagree
that our plans to ensure a reliable
sewerage service are the right ones
to follow?
20 | Our draft five-year plan 2015 - 2020
Our plans for this part of our
business link to the above
outcomes (see page 7).
Maintaining our services
Much of what we spend is aimed at ensuring we continue to provide
the same high level of service. This includes water and sewage
treatment, monitoring equipment to check how well it’s working, and
replacing it before it affects the service we provide.
What you’ve told us
• You are broadly happy with our service
and the provision of good-quality,
reliable drinking water.
• Neither domestic nor business
customers would be willing to accept
a reduction in service, even if it would
reduce bills.
• You care about your community and
the environment and expect us to do
the same in delivering our services.
Challenges
• Much of our equipment is still working
well but some is reaching the end of its
life, so costs more to maintain.
• We need to improve our day-to-day
awareness of how our equipment is
performing, through better monitoring
and control mechanisms.
• Population growth, the effects of
climate change, rising energy costs and
changing environmental legislation all
mean, in many cases, that we have to
take action in order to prevent our level
of service deteriorating.
Progress so far
• We have checked and, where necessary,
improved the level of flood protection
at eight of our sites, and plan to add
another nine by 2015.
• We have installed monitors at 1,500
locations throughout our pipes,
pumping stations and treatment works
so we can better understand and
manage the performance of our water
and sewage systems.
• Major upgrade work is nearing
completion at our five largest sewage
works, to ensure the quality of treated
effluent we discharge to the tidal River
Thames.
What we’re planning
It is important that our water treatment
works provide a safe and reliable supply,
especially in the face of pressure from
population growth and climate change.
We will focus on improving a number of
our key London works, such as Ashford
Common and Walton, in west London.
The largest of these will be our treatment
works in Walthamstow, where our work will
include major upgrades to filters. This will
ensure we continue to provide safe and
reliable supplies in all situations.
Some of our planned work will better
protect supplies if things go wrong or
when repairs are needed. One example
is in Oxfordshire, where we plan to build a
second main to transport water north to
Banbury. This will ensure we can continue
to provide a safe and reliable supply if the
existing pipeline bursts.
One of the biggest projects we must carry
out to maintain our standards is a major
upgrade to Deephams sewage works in
Edmonton, north-east London. We need to
do this to keep pace with local population
growth, update ageing plant and ensure
we can treat sewage to new standards set
by the Environment Agency for river water
quality.
At our two largest sewage works, in east
London, recycling the treated sewage
sludge on farmers’ fields – as we do
elsewhere – would require numerous
lorry journeys through built-up areas. We
therefore burn this solid residue in a process
that also generates renewable energy to
use on site. The incineration equipment
will reach the end of its life by 2020, so we
plan to refit both sites. We plan ultimately
to install a new process at both sites
beyond 2030, but need to first test this to
ensure we can run it at the scale required.
We will continue to protect our most critical
sites from the effects of flooding, and have
assessed almost 7,000 locations and pieces
of equipment. The sites where we currently
propose making improvements include
our water treatment works in Hornsey
and Walthamstow and our sewage works
in Camberley and Marlow. In each case,
we will put in place measures to protect
them from a one-in-200 year storm – for
example, by improving drainage or raising
flood-sensitive equipment above ground
level.
Our draft five year plan 2015 - 2020 | 21
The recent wet weather has meant our
sewage works have needed to treat
much higher volumes of wastewater than
usual, and our plans include renewing key
equipment, such as plant that handles
heavy rainfall.
We aim to improve the way we maintain
our equipment, using the latest computer
‘modelling’ techniques to help determine
when and where to make changes. This
includes making improvements to our
monitoring and control systems.
In addition, we will fit monitors at many
of our discharge points. These are places
where sewers or treatment works are
designed to occasionally overflow to
local watercourses once their capacity
has been exceeded following heavy
rain. The locations we have chosen are
all upstream of sensitive areas such as
sites used for recreation. Monitoring the
overflows will give us better information on
when they operate and the volumes they
discharge, which will help us better target
improvements.
We aim to carry out more proactive
maintenance work, rather than having to
repair equipment when it breaks.
Better maintenance will help reduce
costs in the long term, easing pressure on
customers’ bills. We will concentrate on
the most important pieces of equipment.
These include inlet screens, which remove
large items like wet wipes and nappies from
the sewage, and aerators, which disperse
oxygen through the sewage as part of the
treatment process.
We are already updating this, using
new technology. By 2015, we will have
installed new equipment at 6,700 locations
throughout our pipes, pumping stations
and treatment works, and a further 1,800
will be added by 2020.
We will then have monitors in place at all
our treatment sites, allowing us to remotely
check them from other locations. We will
also be able to remotely control water
treatment works covering 80 per cent of
the population we supply and, at sewage
works, 75 per cent of our population.
The new monitors in many of our water
mains and sewers will help warn when a
burst main is likely to occur, or when rising
sewage levels could cause flooding. This
will help us respond quicker or, in some
cases, allow us to prevent things going
wrong in the first place.
*This is a storm that would be expected to
occur, on average, once in any 200-year period.
£108
This work could cost
per year (excluding inflation) in an
average household bill in 2019/20.
For more details, see pages 28 and 29.
How far do you agree or disagree
with our plans to maintain our
services?
22 | Our draft five-year plan 2015 - 2020
Protecting
the environment
Our plans for this part of our
business link to the above
outcomes (see page 7).
Treated effluent from our 350 sewage works can affect the health of local
rivers and streams to which we recycle it. We invest to ensure these discharges
are of the required high standards. And we are increasingly generating
electricity from sewage sludge, to reduce our costs and carbon emissions.
What you’ve told us
• You care about the environment and
see protecting rivers as a high priority.
• You try to take steps to protect the
environment, and expect us to do the
same.
Challenges
• Estimates suggest there are still around
63,000 properties in our region where
the drains are wrongly connected,
causing pollution to rivers and streams.
• Rising energy costs increase the need
for us to generate renewable energy
from the treatment of sewage sludge.
• New legislation will impose additional
demands on how we operate.
Progress so far
• We generate about 12 per cent of our
own energy needs by sourcing power
from sewage sludge as part of the
treatment process.
• We are installing technology at six of
our sewage works to ‘pressure cook’
sewage sludge, allowing us to generate
enough renewable energy to run a
town the size of Woking.
• More than 99 per cent of the Sites of
Special Scientific Interest we directly
manage are in the two highest status
categories awarded by Natural
England.
What we’re planning
We have to recognise that our business, in
taking water from the environment and
recycling treated wastewater to it, will
inevitably have environmental impacts,
not just in the aquatic environment but
in our use of energy and chemicals, and
through land use. A significant proportion
of our work is aimed at improving the
environment or limiting our impact on it.
We will also do this at our works near
Rickmansworth, where new equipment
will allow us to treat sludge from works
in Harpenden and Marlow, two sites
that cannot generate power. These
changes are together likely to make
the Rickmansworth works our first to be
completely self-sufficient in power terms –
in other words, to generate as much as it
uses.
One of the main areas where we intend to
improve things further is in increasing our
energy efficiency and generating more of
our own renewable electricity from sewage,
where this is economic. This helps combat
rising power cost, easing pressure on
customers’ bills. It also helps work towards
the government target of reducing our
carbon emissions to 34 per cent below our
1990 level.
We also propose to stop treating sludge
with lime at our works in Guildford,
Farnham, Fleet and Newbury. The liming
process does not produce energy and the
treated sludge is smelly, which can upset
neighbours when we recycle it on farm
land. Instead, we will ‘pressure cook’
the sludge using new equipment at our
Basingstoke works. This will again increase
our power output, while reducing our
greenhouse gas emissions.
At many larger sewage works we generate
renewable energy for use on site from the
methane gas given off during treatment,
or by burning sewage sludge in a special
incinerator. We plan to replace some of
the equipment used in this process with
more efficient technology. As a result, we
will get more power from the same amount
of sludge, at works in Bracknell, Slough,
Swindon, Edmonton and Twickenham.
As a result of these changes, by 2020 we
will be generating energy from virtually all
of the sewage we treat.
Most of the renewable power we generate
comes from sewage sludge. However, we
are also planning to expand the amount
we generate from solar power, wind
turbines, hydroelectric schemes and heat
recovery on our sites.
Overall, we plan to increase the total
proportion of renewable electricity we
generate from about 20 per cent of our
own power needs in 2015 to around 30 per
cent by 2020.
Our draft five year plan 2015 - 2020 | 23
We also work with the Environment Agency
to locate properties where plumbing from
kitchens and toilets has been wrongly
connected. Foul waste enters pipes meant
only to carry rainwater and discharges
directly into rivers and streams, causing
pollution. Our work has been increasing in
recent years, often prompted by pollution
spotted by members of the public.
Our sewage works release treated
wastewater into local rivers or streams
at the end of the process. We monitor
the cleanliness of these discharges,
ensuring they meet standards set by the
Environment Agency to safeguard the
natural environment.
Local development increases the amount
of sewage our works must treat, and a
lot of our work is aimed at maintaining or
improving the quality of sewage effluent
discharge. Between 2015 and 2020, we
anticipate making improvements of this
sort at sites such as Arborfield, Chesham,
Faringdon, Oxford, Upper Heyford and our
works in Kingston.
In addition to this, the creation of the
Thames Tideway Tunnel (see page 8) will
make a major improvement to the quality
of water in the tidal River Thames.
The condition of local rivers will also be
boosted by the Water Framework Directive
– one of the most ambitious pieces of
environmental law ever conceived. We will
have a large part to play in addressing its
aim of restoring rivers to ‘good’ ecological
status.
We are currently working with the
Environment Agency to understand and
identify specific improvements required
by the Directive. We have provisionally
included a significant amount of funding in
our business plan to cover the work needed.
Among other laws affecting us are
regulations requiring us to install screens to
protect eels, a species whose numbers have
declined by 90 per cent in recent years.
The screens will prevent eels being drawn
into our reservoirs at the locations where
we take water from rivers.
Any pollution incident is a cause for
concern. We recognise the impact that
pollution from sewers or treatment works
can have on the environment and will
continue to work hard to significantly
reduce the number of incidents.
We have been working on 189 projects
to trace and rectify these problems in
the current five-year period and plan to
increase this to 200 between 2015 and
2020. Our work is region-wide, but much
will be in London, to tackle pollution of
rivers including the Brent, Crane, Colne,
Wandle and Lee.
It is also vital we take a responsible
attitude to the land we own. This often
provides undisturbed havens for wildlife,
especially in towns and cities. For example,
orchids can be found at nearly 50 of our
sites. We will continue to protect and
enhance biodiversity in our work, including
grounds maintenance and nature reserve
management.
Among our activities, we will help address
the declining number of pollinating
insects. We will continue to work with
the Bumblebee Conservation Trust to
change the way we manage our sites,
such as providing bee-friendly plants and
maximising the flowering period.
We will continue an initiative – now in
its third year – to spread awareness
of the important role our sites play in
conservation, to both staff and local
residents.
£34
This work could cost
per year (excluding inflation) in an
average household bill in 2019/20.
For more details, see pages 28 and 29.
How far do you agree or disagree
that our plans to protect the
environment are the right ones to
follow?
24 | Our draft five-year plan 2015 - 2020
Our plans for this part of our
business link to the above
outcomes (see page 7).
Playing our part
in the community
We recognise that our operations can have a significant impact on
people living or working near our sites. As a major local company,
our responsibilities also include educating the customers of the
future and, where possible, providing access to the land we own.
What you’ve told us
• You regard education about water and
wastewater as important.
• You want more information when we
are carrying out disruptive maintenance
work.
• Some people living near sewage works
complain that they can’t enjoy their
homes and gardens if odour problems
occur.
Challenges
• A number of our sewage works,
originally built in undeveloped areas,
now have homes near them. This
increases the potential for odour issues
for local residents.
• We carry out the most roadworks of
any company in London, with the
potential to cause delays and disruption
for drivers.
• We must make sure the many
engineering projects we undertake
don’t harm protected species or
damage historical sites.
Progress so far
• We have achieved ‘platinum plus’
status – the highest possible – in
Business in the Community’s Corporate
Responsibility Index.
• We have opened classrooms for school
visits at several of our sites and an
angling academy for young people at
Walthamstow Reservoirs.
• We expect contractors and others
working on our behalf to behave in a
socially responsible way – for example,
by recycling waste.
What we’re planning
We have around 5,000 sites across our
region, and some of our activities, such as
roadworks, are inevitably disruptive. We
aim to minimise the impact of our work on
local communities, for instance by using a
range of less disruptive methods to replace
water mains.
We plan to reinforce the strong working
relationships and partnerships we have
with a range of local organisations. For
example, along with local councils and the
Environment Agency, we are members
of the Oxford Area Flooding Partnership,
which oversees and manages work to
reduce flooding across the city.
We also meet regularly with many local
authorities, including Westminster City
Council. One result of this close working
is that, when a large main burst beneath
Regent Street in March, the council was
able to bring forward planned work to
install a pedestrian island during the
repairs.
These relationships also cover local
environmental organisations, as in Reading,
where we have worked with partners
including the Environment Agency and the
Thames Rivers Trust to enhance a wetland
area close to our water treatment works.
There is a continuing and pressing need
to educate people about water, including
how they can help conserve supplies and
protect sewers from blockages. We are
opening classrooms for young visitors at
several of our sites. These are places where
we can discuss with school children more
about their important role in the water
cycle and provide site tours. We plan to
open two more classrooms at our sewage
works in Bexley and Barking, so they are
spread right across our region.
Our draft five year plan 2015 - 2020 | 25
We will continue our existing education
work. This includes giving presentations
in schools, running science workshops and
attending careers fairs. Our current target
is to talk to 14,000 students each year and
we aim to increase this to 19,000 by 2020.
Operating issues at our sites can
occasionally cause smells which affect
local residents. Our plans include reducing
the risk of this happening at some of our
larger works where issues of this sort have
occurred. We will also tackle similar issues
when we upgrade our Deephams works in
Edmonton, north-east London (see page
20). In total, we aim to reduce the risk of
odour for 5,000 properties.
Improvements of this sort typically involve
covering tanks where sewage is held during
the treatment process, but we also consider
other options. In addition, we have plans
to monitor other sites so that we can
quickly detect potential odour issues and
step in to solve them.
We provide access to 111 of our sites. Our
activities to improve these will include
upgrading access to nature reserves we run
at our water treatment works in Kempton
and our sewage works in Bexley. Work will
include improving signage and providing
wheelchair access.
One of our biggest sites is the 200-hectare
Walthamstow Wetlands, which includes
10 reservoirs. We are turning this into a
new urban wetland and nature reserve, in
a partnership with organisations including
local authorities and the Heritage Lottery
Fund. This initiative, which should be
completed by 2019, requires no further
funding as part of our five-year plan.
London residents have fewer opportunities
to access green spaces than people in
other parts of our region. We will work
with the London Borough of Newham to
improve the Greenway, a footpath that
runs along the top of our biggest sewer in
north London. We will also do the same
for the Ridgeway, its counterpart south
of the Thames, working with the London
Borough of Bexley. We aim to enhance
these footpaths’ value as ‘green corridors’
for bees and bugs.
We will continue to employ people with
the right skills and capabilities, and to
encourage their development. This
includes maintaining our programmes to
take on new apprentices and graduates,
and working with the Government on
existing and new initiatives.
£3
This work could cost
per year (excluding inflation) in an
average household bill in 2019/20.
For more details, see pages 28 and 29.
How far do you agree or disagree
that our plans for working with
communities are the right ones for
us to follow?
26 | Our draft five-year plan 2015 - 2020
Innovative thinking:
How we aim to keep down costs
At a time when household budgets are tight, it’s more
important than ever that we find the most cost-effective ways
of delivering our services.
What you’ve told us
• You want to see higher standards of
service at a reduced cost, which requires
us to think innovatively about how we
provide services.
Challenges
• The economic downturn increases the
need to ensure customers’ bills remain
affordable.
• Rising power costs make it more
important to save energy and generate
renewable electricity from sewage.
• UK carbon reduction targets emphasise
the need to reduce our carbon
footprint.
We naturally aim to be as efficient as
possible in what we do, but increasingly
we are trying to find new ways to get the
same, or better, results at a lower cost.
Innovation can bring many benefits,
including saving time, lessening our impact
on the environment and promoting safer
ways of working. In many cases, it also
reduces what we need to spend, easing
pressure on bills. Our economic regulator,
Ofwat, expects that innovation will play an
increasingly prominent role in the work we
plan for the future, and we agree.
Here are some of the ways in which we are
getting the most for your money.
Generating energy from sewage
Electricity already costs us around £100
million a year, and power prices are
forecast to rise faster than inflation. So we
are naturally looking at ways of generating
as much of our own energy as possible.
This starts with seeking to maximise the
energy we can extract from sewage, which
we utilise on site.
We are using new ways to treat sewage
sludge. As mentioned on page 20, we
are already employing a new process to
‘pressure cook’ sludge. This releases up to
30 per cent more gas than conventional
processes, which we can then turn into
renewable electricity.
We are also using presses developed for
the cider industry to extract juice from
apples, and are instead using them to
squeeze water from sewage sludge. This
reduces the volume of sludge we recycle on
farm land, which cuts the number of lorry
journeys needed, helping the environment
and saving money. A trial at Oxford sewage
works has been so successful that we are
set to install these presses at four of our
major sewage works.
Our draft five year plan 2015 - 2020 | 27
At Farmoor, near Oxford, we have been
growing long-rooted plants like reeds and
sedge at the outlet of one of our reservoirs.
Daphnia – commonly known as the water
flea – flourish around the roots, and the
hope is that they will eat the algae in
sufficient quantities to reduce the problem.
The approach would also minimise our use
of chemicals, and could be used at other
sites if successful.
Cutting the costs of sewage treatment
Another way to improve efficiency is by
focusing on the aeration process, where
we bubble air through wastewater to
encourage the natural breakdown of
sewage. This is an energy-intensive
part of the process and we aim to cut
the power costs by up to half though a
range of methods. Among these, we are
trialling a more advanced control system
at our sewage works in Marlow, so we
only pump in as much air as necessary. At
rural sites, we aim to increase our use of
low-technology, environmentally-friendly
solutions such as lagoons and reed beds,
which introduce air without the need for
pumping.
An innovative process is being pioneered
at Slough sewage works, where we are
extracting phosphorus from sewage. We
then form it into crystalline pellets which
can be sold as high-value fertiliser for
crops, lawns and gardens. Removing the
phosphorus also avoids the build-up of the
compound struvite, which forms a scale
inside pipes and valves and sometimes
blocks them completely. Preventing this
saves on pumping, maintenance and the
chemical dosing we normally use to tackle
the problem.
Focussing on problem areas
We are looking at how to better analyse
records and updates of problems with our
sewers, such as blockages and collapsed
sections of pipe.
The aim is that we will be able to identify
‘hotspots’ where issues are likely to recur,
so that we can improve the way we target
improvements. These include laying new
sections of sewer or installing equipment
that releases bacteria and enzymes to try
to prevent fat forming blockages inside the
pipe.
We are using the same technique to predict
the most likely areas where groundwater
could infiltrate our sewers. This includes
analysing data on soil types, local geology
and the proximity of rivers.
Getting to the root of capacity issues
The natural formation of algae in our
reservoirs at certain times of the year can
reduce capacity at water treatment works.
The problems occur when the algae block
the filters which form an important early
stage in the treatment process.
One potential low-cost solution involves
growing certain plants in reservoirs, to
encourage populations of a tiny crustacean
which consumes algae.
Working smarter with our partners
We work hard to find savings in
our engineering projects, without
compromising standards. For example,
from this year we are forming an ‘alliance’
with several contractors to complete
much of our major work over the 2015-20
period. By planning early and working as
a collaborative joint team, we can focus on
new ways of doing things and achieving
the best value for money in a safe and
sustainable manner.
We will also save money from a process we
intend to use in engineering projects right
across our region. This involves making
items in a factory, rather than constructing
them on the site where they are needed.
Tanks, manholes and other objects can
be built elsewhere and then delivered to
the relevant location. The benefits also
include less time spent on site, meaning
less disruption for residents, and improved
safety – for example, by avoiding work in
confined spaces.
28 | Our draft five-year plan 2015 - 2020
How this could
affect your bill
The proposals set out in this plan are a summary of the business
plan we currently intend to submit to Ofwat at the end of the
year. Next year’s price review will then determine the level of bills
for the years 2015 to 2020.
£350
£340
£369
£371
£370
£358
2017 - 2018
£360
£367
2019 - 2020
£370
2018 - 2019
£380
2016 - 2017
We are putting a case to our regulator to
recover a proportion of these costs, which
have so far not been included in customers’
bills, and asking if they could be recovered
over more than one year. This would avoid
bills rising to £377 for one year and then
reducing again.
The Thames Tideway Tunnel will become a significant additional cost for
our wastewater customers during this period. The bill impact for each
year is not yet known. See text on this page and page 7 for details.
2015 - 2016
Our current average water and sewerage
bill is £354. Next year, bills could be
affected by costs we have incurred which
could not have been accurately predicted
when bills were last set in 2009. These
cover:
• Maintaining sewers which were
previously privately owned, and which
new legislation required us to adopt
• A shortfall in funding from the growing
number of customers who fail to pay us
• The purchase of land needed to build
the Thames Tideway Tunnel
£330
£300
£0
If the five-year plan described earlier in
this document is accepted, its costs would
add just £13 to your bill by 2019/2020.
However, on top of this, the costs of
building the Thames Tideway Tunnel will
also start to be paid by our wastewater
customers during this period. The initial
impact on bills will be small but will increase
as the work is carried out. Figures for each
year are not yet known, but the maximum
impact of up to £70-80 (at 2011 prices) is
likely to be reached in the early 2020s.
Financial assumptions
Our figures do not include the cost of
inflation, as this cannot be accurately
predicted. The prices we have included are
therefore based on 2013/14 prices, with
the exception of the expected cost of the
Thames Tideway Tunnel, which is based on
2011 prices. Inflation would be added to
any price limits set by Ofwat, each year, at
the level of the Retail Price Index. Our draft five year plan 2015 - 2020 | 29
Please note that we propose
introducing a social tariff from 2015.
For more details, see page 12.
Here we show what an average bill of £370 (excluding the Thames
Tideway Tunnel and inflation) could pay for in 2019/20. Each ‘layer’ in the
glass corresponds to one of the eight main sections of this document.
Customer service (£20)
Includes the costs of
running our call centres,
dealing with enquiries and
managing accounts.
Maintaining our services
(£108)
Pays for maintaining the
same level of service,
including water and sewage
treatment, and monitoring.
Protecting the
environment (£34)
Includes improving sewage
works to protect rivers, and
technology to generate
power from sludge.
Bad debt (£11)
The costs of customers who
fail to pay for the services
they receive are added to
everyone else’s bill.
Getting good-quality
water to your tap (£86)
The cost of delivering water
to your tap.
Running a reliable
sewerage service (£82)
Funds the removal of
sewage and work to tackle
blockages and flooding.
Playing our part in the
community (£3)
Covers odour reduction
from sewage works,
customer education and
access to sites.
The money we invest to maintain and
improve our service is not all collected
through customers’ bills in the year in
which we spend it.
It funds our day-to-day operations, but
does not cover all of the large sums needed
to build new assets, from treatment
processes to new sewers. These will last for
a number of years – in some cases decades
– so we don’t pass on the total cost
through bills in the space of just one year.
Making sure there’s
enough water to go
round (£26)
Pays for sourcing water,
fixing leaks and other work
to control demand.
Instead, we spread it over a longer
period of time, and we borrow money
to fill the gap, either via borrowing from
banks (debt) or through investment from
shareholders (equity). These investors
expect a reasonable rate of return, paid
either as interest on debt or in the form of
shareholder dividends.
At every five-year price review, Ofwat sets
a rate of return it believes will be necessary
in order for water companies to attract
investment. It does this by taking into
account both the cost of debt and the cost
of equity.
To establish the impact on bills
of our plan, we have made some
assumptions. For example, we have
assumed a rate of return of 4 per cent
(after tax, excluding inflation). This
means that for every £1 we invest,
we would charge customers a total of
4 pence on their annual bill to cover
the cost of raising this capital. This is
included in the costs set out above,
spread proportionally between the
areas shown.
How far do you agree or disagree
that our plans will provide value for
money for our customers?
30 | Our draft five-year plan 2015 - 2020
Our long-term strategy:
a summary
Our draft company strategy looks to address the
challenges we will face in the 25 years to 2040.
We anticipate that our role will always be
to provide our customers with reliable
supplies of clean, safe drinking water and
to recycle their wastewater safely to the
environment. In doing so we will deliver
standards of service that meet customer
expectations and are affordable, we will
comply with all the applicable regulations
and we will regard the health, safety and
wellbeing of our staff as an absolute
priority. The other main elements of our
strategy are set out below, with further
detail and explanation in our long-term
strategy.
Customer service strategy overview
We have a vigorous strategy to make
year-on-year improvements to our service
level, and are investing significantly in a
range of activities.
Most of our customers only need to make
contact with us to pay their bills. We will
save time, cost and confusion by making
our bills easier to understand, and easier to
pay, with simple and secure online account
management.
When customers do need to contact us, for
instance to report a problem with their
water supply, we will place a higher priority
on getting things right first time and
communicating effectively at every
opportunity.
We will continue to invest in staff training
and new technology, both of which will
improve satisfaction and reduce
complaints.
achieve a comprehensive understanding of
how our network is operating. This is
essential in order to target leakage and
pressure management activities efficiently.
Affordability will be as high a priority for us
as it is for our customers. We will introduce
a means-tested social tariff and continue
with other tried and tested ways to help
our most disadvantaged customers.
We will play a full part in identifying the
best long-term package of measures to
supply the South East of England, including
potential new inter-connections between
companies.
The costs of non-payment of bills are
ultimately borne by the customers who do
pay. To minimise this burden on our
customers, we will pilot new ways to ensure
that those who can pay, do pay.
We will continue to study three main
options for a major new water resource,
likely to be needed in the late 2020s: a new
reservoir, wastewater recycling in London,
and long-distance water transfers. Each
has advantages and disadvantages and we
need to examine them carefully.
We will offer business customers a wider
range of services appropriate to their
specific needs.
Water supply strategy overview
In meeting the need for water our priority
will always be to manage demand through
reducing leakage, metering supplies and
actively encouraging the wise use of water.
If and when this approach is either
insufficient or does not represent best
overall value, we will develop new resources.
We will become a fully metered business,
using ‘smart’ meters. By 2030 at the
latest, all business and residential buildings
will be metered. Where it is not practical to
fit meters to individual households we will
fit a bulk meter to each building, in order to
We will improve the capacity and reliability
of our major water treatment works and
continue to aim for 100 per cent
compliance with drinking water quality.
We have an integrated network of large
mains, operating under high pressure, that
form the main arteries of our system. Any
burst causes major disruption and water
loss. From 2020 we will undertake a
structured programme of monitoring and,
where necessary, repairing and/or replacing
them.
Our draft five-year plan 2015 - 2020 | 31
Wastewater treatment
strategy overview
We will play our full part in ensuring the
delivery of the Thames Tideway Tunnel,
meeting all project milestones. This will
prevent virtually all of the discharges from
London’s overloaded sewer system to the
tidal River Thames, significantly reducing
pollution from about 2023.
We will continue to give priority to reducing
sewer flooding and maintaining river water
quality, in line with customer expectations.
In managing our sewer network we will
look for innovative and cost-effective ways
to limit the volumes of rain water entering
the sewers. This will help reduce the risk of
sewer flooding of homes and gardens, and
of discharges to rivers and streams from
combined sewer overflows. Sustainable
drainage must be built in to new
developments and given careful
consideration as a retro-fit option
elsewhere.
We will continue to increase our use of
real-time control and monitoring systems.
This will improve our management of the
network and the speed and effectiveness
of our response to potential operational
problems.
We will continue to target full
environmental compliance at all our
sewage treatment works and zero pollution
incidents from our network. This will
include continuing to work with the
Environment Agency to identify pollution
from households and businesses with
misconnected drains.
We will work towards generating renewable
energy from virtually all of the sewage
sludge produced at our works and steadily
improve the efficiency of generation,
through the use of thermal hydrolysis. This
will improve our carbon footprint.
Innovation will continue to play a major
part here, as it will in reducing the amount
of energy required in the energy-intensive
parts of our treatment processes.
How far do you agree or disagree
that our long-term strategy focuses
on the right areas?
Tell us what
you think
We’d like to know what you
think about our business plan
for 2015-2020.
Online
We want to make sure our plan
is based on your needs and
priorities, so that we can deliver
the service you expect.
Feedback form
We are running an eight-week
consultation on our proposals,
from 1 May until 25 June 2013,
and you can tell us what you think
in the following ways:
Visit www.thameswater.co.uk/haveyoursay and fill in our
online questionnaire
You can pick up a copy of our business plan and a feedback form at a
consultation event in your area or request them by calling our Freephone
number, 0808 178 9055.
Our lines are open from Monday to Friday, 9am to 5pm and closed at
weekends and on bank holidays.
Email
Send us your feedback by email to consultations@thameswater.co.uk
Letter
Write to us at:
Thames Water Business Plan Consultation
Facts International Ltd, FREEPOST HS464, Ashford TN24 8BR
Phone
If you are unable to take part online or in writing, you can also tell us what
you think by calling our Freephone number, 0808 178 9055, and we will
help you to complete the feedback form over the phone.
Our lines are open from Monday to Friday, 9am to 5pm, and closed at
weekends and on bank holidays.
If you need a telephone language interpreter, please call us
on 0845 9200 800. We are open 24 hours a day.
This leaflet can be supplied in large print,
braille, or audio format upon request.
12303 04/13
Is there anything else that we
should consider when planning for
the next five years, or do you have
any other comments?