Consumer priorities and resilience at heart of Severn Trent future plans
Posted: Wednesday 20th August 2008
A more resilient water supply network, stable bills and a smaller carbon footprint are among customers’ priorities which lie at the heart of Severn Trent’s draft business plan for 2010-15.
The draft plan, submitted to Ofwat today (Monday, August 11th), sets out the company’s proposals for delivering water and wastewater services and includes forecasts of revenues, costs, investment, maintenance, proposed price limits and planned improvements to services over the five-year period.
Tony Ballance, Severn Trent’s Director of Regulation and Competition, said: “We believe our draft plan provides the best balance between improved services, the needs of the water environment and a cost that customers are willing to pay. Our proposals are anchored in research, through which customers have told us about their requirements and priorities.
“Customers tell us that ensuring a reliable, safe water supply is their first priority, and we reflect this in our plan. Following the loss of supply to customers in Gloucestershire caused by last summer’s flooding, we plan to provide an alternative source of water to large communities that currently depend on a single supply point. We will reinforce our network, install additional flood protection at sites at risk of river flooding and further reinforce our power supplies to reduce the risk of power failures affecting our network.
“In addition, customers want us to ensure charges are fair and bills kept as low as possible. Our bills are already among the lowest in the UK and we intend to keep them that way,” Tony added.
The outcomes of the draft business plan include:
- Broadly flat bills (rising only slightly above inflation over the five year period)
- Improved services, such as stronger network resilience and reduction in sewer flooding
- Environmental improvements through improving sewage treatment
- Increased spending on assets to ensure that environmental and drinking water quality improvements achieved in the past two decades are maintained
- Challenging financial efficiency targets
- Financial plans which strike the right balance in keeping prices low for the long term while maintaining investor confidence
The proposals also include an appropriate rate of return, based on current circumstances such as the rising cost of debt, the uncertainty of economic market conditions and large borrowing needs over the next 25 years. Capital is required to finance new investments, as the company’s plans cannot be financed by customers’ bills alone and shareholders expect an adequate return on their investment.Severn Trent welcomes customers’ views on the draft business plan, an overview of which has been published on its website this morning. Comments can be emailed to PR09views@severntrent.co.uk
All feedback will be considered in formulating the company’s final plan, to be issued in April 2009. For a longer-term assessment, the company’s 25-year view is also available on its website at www.stwater.co.uk/sds
