Water White Paper lacks metering and competition support, says UK industry

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LONDON, England, Dec. 9, 2011 – A long awaited and delayed government “White Paper” which was predicted to cover crucial topics such as mandatory metering and introducing a competitive environment for utilities in England and Wales, has been met with mixed responses in the UK.

Entitled Water for Life, the document was launched by environment secretary Caroline Spelman who addressed the topic of avoiding future droughts – a key concern currently for utilities in the region.

Reform of the Current Abstraction Regime

The White Paper was published during what is being called a “period of continued drought” in the country with the environmental regulator being forced to issue drought permits to certain utilities to take water from rivers to boost existing reservoirs (see Water & Wastewater International (WWi) story).

Furthermore, major London utility Thames Water is being forced to start up its new desalination plant for the first time since its opening last summer as a result of low rainfall (see WWi story).

Addressing this topic head on, Water for Life encouraged utilities to extract water from the environment in the “least harmful way”. The document committed the government to “introduce a reformed water abstraction regime resilient to the challenges of climate change and population growth…We plan to consult on proposals in 2013 and aim to introduce legislation to reform the regime early in the next Parliament.”

Defra also said that it wants to encourage “interconnection in our water supply system so that we can use our resources more flexibly and efficiently”. Sector regulator, the Environment Agency, has been tasked with looking for interconnection options across all licensed water supplies.

Utility Competition

The White Paper followed key reports previously published on the country’s water sector including Anna Walker’s Review of Charging for Household Water and Sewerage and also Martin Cave’s Review of Competition and Innovation in Water Markets.

The latter recognised the success of the sector since privatisation and recommended changes to increase competition and bring new approaches of working to the sector.

Following up on this report, the Water for Life market reform proposals stated: “We have decided not to introduce fundamental structural change to the industry such as requiring legal separation of water companies’ retail functions. We do not want to take risks with a successful model given the challenges we face in building the resilience of the sector.”

Defra said the next stage to Water for Life will be to publish a draft Water Bill for pre-legislative scrutiny in early 2012 and “introduce a Water Bill as soon as Parliamentary time allows”.

Industry Reaction

Consultancy: Mike Woolgar, managing director of environmental and water management at Atkins, said: “I was surprised to not see more emphasis on metering, which was apparently supported with some enthusiasm in the public consultation. Managing demand reduction and behaviour change from consumers without more firmly sponsoring metering will be a challenge. Done correctly, introducing metering in a sensitive way can help to develop better customer relationships as reported by Southern Water; the more rapid introduction of more widespread metering, alongside the social tariff, could help reduce bad debts in the industry further and put some downward pressure on bills for the consumer…There is a lot of work to be done to develop this White Paper into effective regulation and action.”

Engineering institute: Michael Norton, chair of Institution of Civil Engineers' water panel, said: “We would have liked to see more acknowledgement of the UK’s high dependence on ‘virtual water’ embedded in imported goods. Businesses and domestic users alike need to be aware of their ‘water footprint’ and Government needs to drive this by setting the agenda for change.”

Conservation trust: Carrie Hume, head of conservation policy at the Wildfowl & Wetlands Trust, said: “The government has offered disappointingly little to encourage reduced water use. Water meters do cut consumption and stronger inducements promoting their installation could have been very effective. Unless we harness the power of nature to help prevent flooding we are in for a seriously tough time with major flooding events like those of 2007 in Gloucestershire, which cost £3.4 billion, readily happening again."

A copy of the Water White Paper including an executive summary can be found by clicking here.

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