Wednesday, May 16, 2012
UK: Drought Warning to Water Industry
Water providers have come under increased pressure from the industry watchdog to ensure drought-stricken areas are helped by regions with more plentiful supplies.
The impact of recent weather - flooding in a time of drought - is one of the major long-term issues water suppliers have to tackle, Ofwat warned, as it unveiled guidelines for how it intends to set tariff limits between 2015 and 2020.
The regulator warned the water industry will need to find creative ways of working to meet challenges posed by a bigger population and climate change. As well as giving customers a stronger voice on how water companies deliver services, Ofwat will "send clear signals" to companies on what is required of them, such as trading water during times of drought and heavy rainfall.
Ofwat chief executive Regina Finn said: "These principles will ensure that customers are at the heart of decisions. They need to know that bills are fair and legitimate."
A more detailed consultation on the methodology to be used for the next price review will be published in the autumn.
April was declared the wettest for the month since records began in 1912, but the preceding dry winter meant water companies and the Environment Agency refrained from lifting drought status from several areas for about two weeks.
Ofwat flagged the impact of recent weather as it unveiled its new principles, which also included giving companies "more opportunity to innovate", for example by finding lower cost, lower environmental impact and lower carbon solutions.
The watchdog said it would ensure that regulation is focused and targeted on where it is most needed to protect customers and adapt and support the sector as it learns how to tackle new challenges over time.
Ms Finn said £98 billion has been invested since privatisation, service for customers has improved significantly, drinking water quality is among the best in Europe and average bills are £120 lower than they would have been without regulation.
She added: "But now we need to become smarter in how we value, manage and use water. This means the industry must focus on customers and show them how they are meeting their priorities."