Report to the Secretary of State for Environment, Food and Rural Affairs

Transcription

1 Report to the Secretary of State for Environment, Food and Rural Affairs by Stephen Roscoe BEng MSc CEng MICE an Inspector appointed by the Secretary of State for Environment, Food and Rural Affairs Date: 17 November 2014 WATER RESOURCES MANAGEMENT PLAN REGULATIONS 2007 EXAMINATION IN PUBLIC INTO THE UNITED UTILITIES REVISED DRAFT WATER RESOURCES MANAGEMENT PLAN NOVEMBER 2013 Hearings held on 16 and 17 September 2014 Site Visit made on 16 September 2014 File Ref: APP/WRMP/14/3

2 CONTENTS Section Page No 1 Preliminary Matters 3 Reasoning and Conclusions on Secretary of State s Considerations: 2 The Thirlmere Option: Background 8 Reasonable Expected Delivery Date 9 Potential Barriers 10 3 Feasible Alternatives to the Thirlmere Option: Contingency Plan should the Thirlmere Option 11 become Undeliverable Replacement for the Thirlmere Option at the Present Time 14 Additions to the Thirlmere Option to Reduce Reliance on 18 Ennerdale Water Abstraction Earlier 4 Progressive Reduction of Reliance on Ennerdale Water 18 Abstraction in Advance of the Thirlmere Option 5 Summary of Conclusions and Amendments to the Revised 26 Draft Water Resources 6 Recommendation 29 Appendix Page No A Appearances 30 B Documents 32 C Glossary of Abbreviations 42

3 CASE DETAILS Report Ref: APP/WRMP/14/3 United Utilities: Revised Draft Water Resources dated November 2013 The United Utilities revised draft Water Resources (dwrmp) was made under section 37 of the Water Industry Act 1991, as amended by section 62 of the Water Act 2003, and was published in November By letter dated 2 April 2014 to United Utilities, the Secretary of State called for an Inquiry or other Hearing in connection with the revised dwrmp in accordance with regulation 5(1) of the Water Resources Regulations By letter dated 16 June 2014 to United Utilities, the Secretary of State advised that the revised dwrmp would be subject to an Examination in Public (EiP) with Hearing sessions and also identified the considerations, in the West Cumbria Resource Zone (WCRZ), to be addressed. In a Defra Briefing, dated June 2014, the Inspector was asked to report to the Secretary of State to enable her to decide whether the revised dwrmp is both fit for purpose and meets the statutory requirements in relation to her considerations and the WCRZ or whether it could be deemed to be so if amended in ways identified during the EiP. The Inspector issued a set of written questions on 24 June 2014 to which responses were received and published prior to the Hearings. Hearings were held relating to Security of Supply matters on 16 September 2014 and relating to the River Ehen Water Environment on 17 September Summary of Recommendation: That the Secretary of State should direct that the revised draft WRMP be amended as set out at the end of this report. Document references are shown in square brackets. 1. PRELIMINARY MATTERS 1.1 I have been appointed by the Secretary of State for Environment, Food and Rural Affairs (SoS) to hold an Examination in Public (EiP) into the United Utilities (UU) revised draft Water Resources (dwrmp) dated November 2013 [CD1.6] and to report with recommendations to her. The revised dwrmp resulted from consultation on an earlier dwrmp [CD1.2]. The UU Statement of Response (SoR) [CD1.8] describes how UU has taken account of the representations on the earlier dwrmp and the changes made in the revised dwrmp as a result of them. The SoS s letter calling for an Inquiry or other form of Hearing [GEN2] related to the revised dwrmp, and this report therefore uses the revised dwrmp as its baseline. 1.2 Ms Helen Wilson was appointed as Programme Officer to assist with the procedural and administrative aspects of the EiP. She has played no part in the drafting of this report. Her work however made a significant contribution to the smooth running and timely completion of the EiP. 3

4 1.3 The SoS s letter to UU calling for an Inquiry or other Hearing in connection with the draft Plan [GEN2] gives the reasons for doing so. These can be summarised as follows: Reasons for Exercising the Power The SoS has noted the risks to the security of supply in the West Cumbria Resource Zone (WCRZ), the on-going environmental damage to the River Ehen Special Area of Conservation (SAC), the potential for damage to the Ennerdale Site of Special Scientific Interest (SSSI) and the timeframe proposed to deliver your preferred option to address those risks. The SoS considers that your revised dwrmp and SoR have not fully addressed these risks and that security of supply may only be achieved with unacceptable impacts on a protected environment and over too long a timeframe. Security of Supply Concerns The preferred option outlined in the revised dwrmp for the WCRZ will not be operational until 2024/25. This results in a period of 10 years where there is a risk to the security of supply in the event of a drought. there are concerns about the lack of resilience in abstractions from Ennerdale, lack of alternative supplies in a prolonged drought and the consequent risk to the environment and to customers. Whilst you have identified Thirlmere as your preferred option and have commenced detailed project planning, there remain a number of uncertainties to do with deliverability of this option, including planning permission and access rights. Your SoR fails to make clear whether UU has considered all of the options available or whether it has selected the most appropriate options with regard to overall cost, timing, reliability and the environment. These concerns raise questions about the justification of the long term resource development proposals in the plan without further short term measures or continued work on alternatives. There remains a question over whether sole reliance on delivering Thirlmere, without stronger short term measures or work on alternatives leaves customers as well as the environment exposed to an unacceptable level of risk over too long a period of time, with no adequate contingency if Thirlmere takes longer than expected or cannot be delivered. Environmental Concerns The SoS believes that the risks to the Ennerdale SSSI and the River Ehen SAC during the period before the preferred option is operational have not been fully addressed in the revised dwrmp and SoR, or the Habitats Regulations Assessment (HRA), and therefore UU has failed to meet all of the statutory requirements. In particular the SoS believes that the plan fails to comply with The Conservation of Habitats and Species Regulations

5 The River Ehen SAC is designated primarily for the freshwater mussels found there and is currently assessed by Natural England (NE) to be in unfavourable, declining condition. Although the Habitats Directive makes provision for continued abstraction, this is provided certain tests are met, principally that there are Imperative Reasons of Overriding Public Interest, no alternative solutions and compensatory measures are secured in order to ensure the coherence of the network of European sites is protected. The SoR does not provide sufficient information or evidence to demonstrate that UU has investigated and is putting in place all options that could be used to reduce abstraction from Ennerdale Water before the preferred solution is delivered and that reliance on Ennerdale Water, and therefore the risk to the SAC is being reduced as quickly as is practicable. 1.4 The SoS s letter to UU advising of the EiP [GEN 3] identified the particular considerations on which the SoS wished to be advised, as follows: What is a reasonable expected delivery date for the Thirlmere option? (covered in Section 2 page 9 of this report) What potential barriers exist to the delivery of the Thirlmere option? (covered in Section 2 page 10) What feasible alternatives are there to the Thirlmere option, which could be delivered more quickly than that option? (covered in Section 3) How soon could they be put in place? (covered in Section 3) What environmental and cost impacts would they have? (covered in Section 3) How much water would they yield? (covered in Section 3) In relation to each of the possible feasible alternatives, would they be suitable for use: As a contingency plan or (together with other options) part of a contingency plan in case the Thirlmere option proves undeliverable? (covered in Section 3 page 11) As a replacement for the Thirlmere option (alone or together with other options) as the main solution for the WCRZ? (covered in Section 3 page 14) As an addition to the Thirlmere option, in order to reduce reliance on abstraction from Ennerdale Water if available significantly sooner? (covered in Section 3 page 18) What steps might feasibly be taken between now and the expected delivery date of the Thirlmere option so as to progressively reduce reliance on abstraction from Ennerdale Water until the expected delivery date of the Thirlmere option? (covered in Section 4 page 18) any other things the Inspector deems to be relevant. 5

6 1.5 In addition to the above matters, the Defra briefing [GEN1] also refers to matter relating to the Habitats Directive as follows: The Inspector conducting the Inquiry or other Hearing may also wish to know that in relation to the legislative requirements contained in article 6(4) of the Habitats Directive (implemented by the Conservation of Habitats and Species Regulations 2010) the regulators have agreed a package of mitigation of and compensation for environmental damage, which is accepted to be suitable for the present situation. A plan of action has been agreed containing proposals for what are agreed to be suitable measures and implementation timescales for mitigation and compensation in relation to the on-going damage or risk of damage so far as it is possible to do so, although it will not necessarily fully mitigate or compensate for on-going damage, or for the potential impacts of a drought order, if needed. Procedural Matters 1.6 I issued a set of 51 written questions, including requests for documents, on 24 June 2014 [GEN4]. Whilst these questions were directed at UU, they were published and other parties were given the opportunity to respond. UU and the Environment Agency (EA) responded to all 51 and 6 questions respectively [UU1 & EA3]. 1.7 The Hearings were held on 16 and 17 September 2014 in the Forge Room at the Washington Central Hotel, Washington Street, Workington, Cumbria. I made an accompanied site visit on 16 September 2014 with representatives of UU and the EA. I heard no evidence or submissions on these visits. I also made an unaccompanied site visit to Thirlmere on the same day. 1.8 This report sets out my assessment of, and conclusions on, the SoS s particular considerations on which she wishes to be advised together with other matters that I deem to be relevant. I then address recommendations. Details of those who appeared at the Hearings and EiP documents are at Appendices A and B. A glossary of abbreviations is included at Appendix C. Statutory and Policy Context 1.9 As the Defra briefing indicates [GEN1], the preparation and maintenance of WRMPs became a statutory requirement in April 2007 under s.37 of the Water Industry Act 1991 as amended by s.62 of the Water Act This sets out the requirement for preparation and publication of a WRMP, describes what the WRMP should address and the need for review and revision. The Water Resources Regulations 2007 No. 727 set out the consultation process including the handling of representations and the companies statements of response as well as the power of the SoS to hold an Inquiry or Hearing. Water Resources Directions 1 provide further detail on additional matters to be addressed in 1 The Water Resources Direction 2007; the Water Resources (No.2) Direction 2007; the Water Resources (No.2) (Amendment) Direction 2007; and the Water Resources Direction (England)

7 the WRMP. Other relevant statutes are addressed as necessary in the main body of this report In addition to the legislative framework, the Defra briefing [GEN1] indicates that Defra requires water companies to follow the joint Ofwat, EA, Defra and Welsh Government s Water Resources Planning Guideline 2. This guideline provides a framework for water companies to follow in developing and presenting their WRMPs. It sets out good practice in developing a plan, the various approaches to follow, the scope for flexibility within the plan, and the information that a plan should contain. It also states that Companies should follow this guideline to ensure that their plans cover the requirements specified by the Water Industry Act Statements of Common Ground 1.11 The following Statements of Common Ground (SoCGs), setting out matters agreed as well as differences between the parties that were signatories to them, were submitted prior to the Hearings in response to my request [GEN3]: UU and NE [UU2] UU and the EA [UU3] 1.12 Following further agreement, UU and the EA submitted an additional SoCG prior to the Hearings [UU5]. Strategic Environmental Assessment and Habitats Regulations Assessment 1.13 The Water Resources Planning Guideline advises that a water company should determine whether its WRMP falls within the scope of the Strategic Environmental Assessment (SEA) Directive 3. The UU WRMP is required by legislative provision and is prepared for the management of water. It would form a part of the framework through which future development consents for infrastructure for the sourcing, storage and transfer of water would be assessed. Those projects are likely to fall within Annexes I and II to the Directive on Environmental Impact Assessment 4 and may require assessment under the Habitats Directive 5. In my view therefore, it is likely that the UU WRMP is a plan which requires an SEA under the SEA Directive. An SEA has been undertaken by UU [CD1.7a & CD1.7b] and has been used as an input to the decision making process within the revised dwrmp. There is no evidence before the EiP to suggest that the SEA is not legally compliant In relation to HRA, the Water Resources Planning Guideline advises that a water company must ensure that its plan meets the requirements of the Conservation of Habitats and Species Regulations UU has carried out a screening assessment of the potential impacts of schemes that were included in the revised dwrmp [CD1.3 & CD1.4]. 2 Water resources planning guideline: Environment Agency, Ofwat, Defra and the Welsh Government: June 2012: The guiding principles for developing a water resources management plan and The technical methods and instructions (2 documents) 3 The Environmental Assessment of Plans and Programmes Directive 2004 (2001/42/EC) 4 85/337/EEC amended by 97/11/EC and 2003/35/EC 5 92/43/EEC 7

8 2. THE THIRLMERE OPTION Background 2.1 The revised dwrmp [CD1.6] includes the need to revoke the existing abstraction licence at Ennerdale Water, which is required to protect the Habitats Directive designated freshwater species within the River Ehen downstream of the abstraction [UU4 para ]. The revocation of the licence will result in a substantial supply-demand deficit in the WCRZ [UU4 fig3]. The scale of this deficit requires significant investment to secure a reliable water supply in the WCRZ and reduce risk to the future security of supply to an acceptable level. 2.2 Following an options appraisal [CD1.30], the revised dwrmp identifies three options to address this deficit. These are: the Thirlmere transfer; local sources or lowest cost; and the Kielder transfer. The Thirlmere transfer option comprises the pipeline transfer of untreated water from the Integrated Resource Zone (IRZ) to replace all sources within the WCRZ. The local sources option provides a selection of ground and surface water schemes, together with the necessary connectivity improvements, within the WCRZ. The Kielder transfer option comprises the pipeline transfer of untreated water from the Northumbrian Water area to replace all sources within the WCRZ. 2.3 The revised dwrmp then identifies UU s preferred solution, the Thirlmere transfer option [CD1.6 secn10.2]. This preference was informed by a Level 2 assessment of each of the three options [UU4 para ]. It is broadly on the basis of the Thirlmere transfer option being a more comprehensive and deliverable solution than the local sources option and having an earlier completion and lower cost than the Kielder transfer option. 2.4 Further work has been carried out on and associated with the Thirlmere transfer option since the publication of the revised dwrmp and in response to the SoS s decision to hold an EiP [GEN2]. This work has subsequently continued and has been explained in response to Inspector s questions [UU1] and in the UU statement for the Hearings [UU4]. 2.5 Following publication of the revised dwrmp and completion of the EA s review of consents process, the EA confirmed the need to revoke the Ennerdale Water abstraction licence [UU4 para ]. The EA intends to revoke the licence as soon as is reasonably practicable and investigate options with regard to the timing of weir removal and the withdrawal of compensation flow [CD1.42]. The EA however agreed that there are imperative reasons of overriding public interest to continue abstraction, with an appropriate package on compensatory measures, until the long term solution is implemented [CD1.34]. The EA notified the SoS under Regulations 62(5) and 64(2) of the Habitats Regulations The compensatory measures package relates to the legislative requirements contained in article 6(4) of the Habitats Directive (implemented by Habitats Regulations 2010). It has subsequently been 6 The Conservation of Habitats and Species Regulations

9 agreed between UU, the EA and NE and accepted to be suitable for the present situation [CD1.26]. 2.7 Under the package, UU has committed to undertake certain ecological improvement measures. These are: the cessation of agricultural activities on UU s land; the purchase of a farm adjoining the River Ehen and the cessation of agricultural activities on it; the funding of improvement works to address sources of nutrient pollution in Ennerdale Water; the funding of the artificial encystment, or formation of cysts, of freshwater mussel glochidia, or larvae, on salmon in the River Ehen (which is an integral part of the mussel life cycle [CD2.5 app1]); the funding of a River Ehen habitat management project officer until 2020/21; the revocation of the Crummock Water and Dash Beck abstraction licences no later than 2025; and the revocation of the Chapel House reservoir and Over Water abstraction licences no later than Under the package, UU has also committed to undertake other improvement measures, although these are subject to further research and monitoring. These are: the funding of improvement works to address sources of risk to the River Ehen; the funding of improvement works on the River Brathay catchment which has been selected as a priority river for freshwater mussel recovery; the removal of abstraction-related infrastructure, including weirs, at Crummock Water and Dash Beck; the removal of abstraction-related infrastructure, including weirs, at Chapel House and Over Water; and the removal of a bleaching weir on the River Ehen. UU has also committed to undertake 8 River Ehen related research and monitoring projects in conjunction with the EA and NE. Progress has been made in accordance with the agreed package [CD1.40]. 2.9 The compensatory measures package will be secured by a management agreement under Regulation 16 of The Conservation of Habitats and Species Regulations 2010 [CD1.40 secn5]. Reasonable Expected Delivery Date 2.10 From work carried out following the publication of the revised dwrmp, UU is of the opinion that March 2022 is a reasonable expected delivery date for the Thirlmere option [UU4 paras & ]. This date has been brought forward from the 2024/25 date in the revised dwrmp due to early completion of ecological surveys using transitional funding, a rationalised planning permission process and the external assessment of the proposed implementation schedule by a major civil engineering contractor [UU1 question 11 response] An independent assessment carried out by the EA concluded that the option could be delivered by October The EA however now accepts that the 6 month difference between the parties at this stage of the scheme is not material and therefore accepts that March 2022 is a reasonable expected delivery date [UU3 item5.3]. In view of the independent assessment and the agreement between the parties, I am satisfied that March 2022 is a reasonable expected delivery date for the Thirlmere option I therefore conclude that it is necessary to update the revised dwrmp in terms of the work that has been undertaken since the November 2013 version in relation to the Thirlmere option, as is sought by the EA [UU3 9

10 issue11]. This is particularly in relation to the PIU date. This would ensure that future monitoring could take place against a realistic baseline and would render the WRMP fit for purpose. Potential Barriers 2.13 UU has prepared a live project risk register [UU4 para ]. This does not indicate any areas of gross project risk [UU4 para ]. Key risks are currently identified by UU as additional ecological surveys, unforeseen ground conditions and planning matters. I am of the view that the working relationship apparent during the EiP between UU, the EA and NE will be of assistance in mitigating risk due to additional ecological surveys in that it would provide for the early identification of any additional work in this regard Following the publication of the revised dwrmp, UU has assembled a project team, utilising transitional funding allocated by Ofwat, as expected by the EA [EA4 para & UU4 paras & ]. The work of this team will assist in reducing risk on the Thirlmere option including risks relating to ground conditions UU is also due to agree a planning performance agreement in the near future with: the EA; NE; the Lake District National Park, as local planning authority; Cumbria County Council, who would project manage the agreement; and Copeland and Allerdale Borough Councils, as consultees [EA4 app2 para2.3.1]. At the River Ehen Water Environment Hearing, UU explained that a meeting to consider the final draft of this agreement had been set for 6 October I consider that such an agreement would reduce the planning risks identified by UU Concerns had been raised in respect of the landscape impact of a water treatment works at Thirlmere [EA4 para5.5.2]. This has been taken into account, and the proposal now incorporates a water treatment works outside the Lake District National Park [UU2 app1 issue13.2 & CD1.27b]. There are no other landscape objections from any statutory body. Furthermore, the pipeline route would be positioned along features such as roads for ease of access and to reduce landscape impact during construction [CD1.7b secn2.2.1]. In my view, this evidence suggests that planning risks due to landscape impact are capable of adequate mitigation during the project The SoS has identified uncertainties in relation to access rights as a potential source of risk on the project [GEN2]. The project risk register identifies a pipeline route access risk, but does not place it within the highest risk categories [CD1.41]. Land referencing has commenced to mitigate this risk, and the register recognises that early negotiation on the route and early land purchase for the water treatment works would be required. I am therefore satisfied that this risk has been sufficiently addressed at this stage in the project There are other risks identified on the register with similar risk categories to the key risks identified above [CD1.41]. These are the absence of third party, stakeholder, regulator or local authority support and adverse weather. The register however identifies mitigation actions for these risks which include detailed liaison with other parties to maintain support and 10

11 phasing of work to reduce weather impacts. There is therefore no reason to suggest that these other risks are significant or unusual in terms of the delivery of the project, and I consider that they have been satisfactorily addressed In view of all of the above points, I consider that risks in relation to the Thirlmere option, and thereby security of supply, have been sufficiently addressed. I am therefore satisfied that potential barriers have been addressed to a level of detail that is appropriate for this stage of the project and there is no need to amend the revised dwrmp in this regard. 3. FEASIBLE ALTERNATIVES TO THE THIRLMERE OPTION Contingency Plan should the Thirlmere option become Undeliverable 3.1 The EA had been concerned that UU had not identified a contingency plan should the preferred Thirlmere option in the revised dwrmp become undeliverable [UU3 app1 item7.2]. This difference between the parties has now however been resolved as a result of the UU response to my written questions, its EiP statement and discussion between the parties. 3.2 It has now been agreed that UU will prepare a contingency plan for West Cumbria water supplies on the best information currently available, for inclusion in its final WRMP [UU5 secn3]. The contingency plan will be based on the local sources option in the revised dwrmp and will remain at the level of detail to which the Thirlmere option was assessed in the revised dwrmp. The plan will not progress to the establishment of a project team or more detailed work unless the Thirlmere option proves undeliverable. Any contingency plan is likely to include the following solutions. 3.3 In terms of project timing, any prospect of the Thirlmere option being undeliverable would probably become apparent between 2016 and 2018 [UU4 para ]. Study work is currently underway to assess feasible levels of groundwater extraction in West Cumbria. The current work involves various stakeholders [UU3 app4] and is due to be completed by March 2015, although further work may then be carried out. By 2016 however, far more information will be available on feasible levels of groundwater extraction. These levels would potentially allow further extraction from the West and North Cumbria aquifers. Such extraction would be likely to include projects that would be similar to those within the lowest cost option in the revised dwrmp [CD1.6 secn10.3 & CD1.43 secns8.8 & 9.1]. 3.4 The expected date for such groundwater schemes to be put in place is between 2023 and 2025 [UU4 para ]. Their cost is estimated at some 233m and design capacity or yield at some 60Ml/d [UU4 app5 WC05, 09 & 24c]. There is a potential impact from further West Cumbria aquifer abstraction on the lower River Ehen SAC subject to the level of aquifer connectivity, which is not yet adequately understood [CD1.43 appb secn9.1]. The distances between the proposed sources in the North Cumbria aquifer and the nearest European sites suggest that adverse impacts are unlikely, but this cannot be confirmed as it depends on aquifer 11

12 connectivity which is not yet adequately understood [CD1.43 appb secn9.1]. There is also the potential for impact on the SSSIs in this area but again this is not adequately understood. 3.5 A contingency plan would also be likely to include the variation of the compensatory measures package that has been agreed between UU and the EA. The package is shortly to be secured by a legal agreement [CD1.40 secn5 & EA4 para ]. Any variation would require a new agreement and would be subject to HRA requirements. The implementation of the compensatory measures includes further study work in conjunction with various stakeholders, which would inform any variation [CD1.26 page4, CD1.40 secns1 & 6 and UU5]. The date at which any variation could be put in place and its environmental and cost impacts and effective yield are unknown at present due to the need for further study work. 3.6 The plan would also potentially make use of third party abstraction licences, including that of the Nuclear Decommissioning Authority at Wastwater [SL1]. Negotiations and stakeholder involvement in this matter is continuing [UU5]. The anticipated date by which any Wastwater scheme could be put in place is July 2023 [UU4 app5 WC04]. Its cost is estimated at some 35.7m and design capacity or yield some 10Ml/d. The impact of the existing abstraction licence on the Wastwater SAC cannot be confirmed until the outcome of the EA's Habitats Directive Review of Consents is made known [CD1.43 appb secn8.5]. Any scheme is unlikely to impact on the River Ehen SAC provided the transfer pipeline route avoids the site. 3.7 The date by which the use of a third party abstraction licence downstream of the River Ehen SAC could be put in place and its cost is not known pending further negotiations [CD1.43 appb secn9.2]. A yield of up to 18Ml/d could be considered for transfer to the Ennerdale water treatment works. The licence has been subject to the Habitats Directive Review of Consents process, and its use may therefore be feasible. 3.8 Finally, a contingency plan could consider the Kielder transfer option that was investigated to Level 2 during the preparation of the dwrmp. This could provide a supply of 75Ml/d, would take 16 years to deliver at an estimated cost of 371m [CD1.6 figs26 & 34 & para10.2.2] and would avoid construction in the Lake District National Park. 3.9 From the above, it can therefore be seen that, whilst the contingency plan will remain at the level of detail that the Thirlmere option was assessed in the revised dwrmp, work to progress matters within it are continuing in various ways. If the Thirlmere option should become undeliverable and the contingency plan requires implementation, it would need to be the subject of a further WRMP in any event. In view of the further preparatory work being carried out however, it is envisaged that, apart from the Kielder transfer option, anticipated delivery of the plan would be between 2023 and 2025 [UU4 para ]. This is, in fact, comparable to the implementation date for the Thirlmere option The EA had expressed concern that Level 2 Project In Use (PIU) data had been identified for the West Cumbria aquifer boreholes scheme, WC05a, and not for other similar schemes [UU3 app1 item2.1]. This was however a typographical error, and should have been reported as Level 1 [UU4 12

13 para ]. The EA advised, at the Security of Supply Hearing, that it was satisfied with this explanation The determination of PIU dates for these, and indeed all other options within and relating to the WCRZ, have used a cumulative probability and statistical norms approach [UU4 para ]. The costs of the various options have been assessed initially using a live and historic project database with staged methodologies to then improve confidence levels. The EA had expressed concerns that the costs of, and timescales for, the options had not been subject to sufficient independent benchmarking [UU3 app1 item2.1] An independent consultant, Franklin and Andrews, has carried out UU wide data assurance and benchmarking verification work, using industry wide data, in relation to the norms in use [UU4 para ]. There is however a lack of directly comparable projects. Whilst this is not ideal, I am satisfied that there is little more that could be done to address the matter. The verification work though shows that the approach in terms of cost and timescale estimates is what would be expected in this sector of infrastructure provision and at this stage of the development of the options. Furthermore, at the Security of Supply Hearing, the EA had no difficulty with this approach. I therefore can see no reason to disagree with the cost and timescale estimates provided by UU In terms of environmental impacts, a number of the above contingency options, particularly concerning groundwater sources, would require HRA and environmental impact assessment work. Whilst elements of these assessments have been addressed in the current study and screening work [CD1.43], any HRA and environmental impact assessment requirements would be more formally considered later in any development of the options In developing the above areas which would be likely to be included as part of a contingency plan, various other options have been considered as follows. The Thirlmere option PIU is currently forecast as 31 March The PIU dates for the feasible resource management options were revised in June 2014 [UU4 table3]. 16 of these schemes have PIU dates later than the Thirlmere option PIU date and therefore are not proposed for inclusion in the contingency plan [UU4 para ]. 6 of these schemes however have PIU dates before that of the Thirlmere option, and these have been considered as follows [CD1.43] Workington desalination, WC10, has been retained as an option pending the outcome of further investigations into stakeholder acceptability and an engineering assessment that are to be undertaken. There are however risks in relation to the crossing of the River Ehen SAC and customer acceptability in view of the abstraction location within the Cumbria Energy Coast [UU4 table4 secn9.4 & CD1.43 secn9.4]. This option was screened out in 2012, but there is now a possibility of shorter lead in times. There is still however difficulties in that this option would be implemented within a very small desalination market that would carry increased non-delivery risks The August 2014 HRA Stage 3 Options Appraisal [CD1.43 secns8.13 & 8.11] revisited an earlier process in balancing the economics of supply and 13

14 demand in respect of final effluent supply to non-household customers and effluent reuse, WC23 and WC25, for the dwrmp [CD1.6 & CD1.30]. Wastewater treatment works final effluent supply to non-household customers, WC23a, would require discussions with non-household customers in relation to acceptability and viability. There is however little significant non-household demand in the Copeland demand area for viability, and the options would therefore result in little benefit in terms of water supply [UU4 para & app1 item8.13]. Furthermore, the transfer capacity of final effluent supply, WC23b and WC23c, would be too large for viability [UU4 app5]. Effluent reuse, WC25, carries high constructability and customer acceptability risks. These options were screened out in the options appraisal [UU4 paras & ] The automation of compensation flow control at Crummock Water, WC19 & WC24f, would allow abstraction to be increased by 2.7Ml/d [UU4 para & app1 item8.6]. It would require 16km of pipeline infrastructure into the Ennerdale water treatment works area, alterations to the treatment works and the associated costs [CD1.43 secn8.6]. UU therefore are not pursuing this option Other alternatives have been screened out in the revised dwrmp on a water available for use basis [UU4 para & CD1.6 secns8 & 10 & app9 & 10]. This screening has subsequently been revisited and re-examined [UU4 paras & , table3 & apps1 & 2 & CD1.43 appb]. This has resulted in the introduction of the Summergrove scheme as a measure in the progressive reduction of Ennerdale Water abstraction In view of all of the above points, I am satisfied that sufficient reasonable contingency alternatives to the Thirlmere option have been identified and that those screened out have been dismissed for good reason. Those identified as suitable have been cogently reasoned, and there is therefore a likely prospect that an appropriate contingency plan could be identified. UU has agreed with the EA that such a plan, based on the best information currently available, should be prepared and included within the final WRMP [UU5] Whilst this matter has been agreed between the parties, it would be necessary for the SoS to direct that such a plan be included in the WRMP, notwithstanding that its implementation would probably require a new WRMP. This is because the inclusion of the contingency plan would render the WRMP fit for purpose and compliant with the Habitat Regulations 2010 in that alternative solutions would be secured to ensure that the coherence of the network of European sites was protected. Replacement for the Thirlmere Option at the Present Time 3.21 The Thirlmere option has been the subject of extensive work and consultation in conjunction with various statutory bodies and stakeholders, including the EA and NE. Support has also been voiced by the UU PR14 Business Plan Customer Challenge Group [UU4 paras & & fig2]. This group is an independent body, formed in 2012, which has been involved in reviewing and challenging UU s approach to formulating its business plan [UU4 para ]. 14

15 3.22 Ofwat has raised concerns in its Draft Determination of price limits on the UU revised business plan [OF3 & OF4]. This is in relation to the fact that the capacity of the Thirlmere transfer pipeline at 80Ml/d would be far greater than the Ennerdale Water revocation deficit of 33ml/d. The Thirlmere option passes in the Draft Determination assessment in respect of need and the robustness of the estimate. It fails however due to a lack of justification of the pipeline capacity even though the cost-benefit appraisal and analysis is said to be robust Ennerdale Water abstraction however only supplies some 45% of that required for the WCRZ [EA4 para2.4.2]. The Thirlmere transfer pipeline would fully supply the WCRZ from the IRZ, which is forecast to have an on-going significant surplus [UU4 para ]. This supply from the IRZ would give greater supply resilience in the WCRZ as it would be independent of the various SACs and SSSIs in the area. Moreover, any future industrial or commercial needs would be more easily satisfied [NE2 para4.1.5] In particular, the supply from the IRZ would allow the surrender of the abstraction licence at Crummock Water. This would benefit the Derwent and Bassenthwaite SAC [NE2 para4.1.1]. NE currently has concerns in respect of the risks associated with abstraction to the limit of the licence, particularly under drought conditions [NE2 para4.1.3]. Indeed, the surrender of this licence is an element of the compensatory measures package [UU4 para & CD1.26 secn2.1 P9] At Over Water, NE requires a hands-off lake level to prevent abstraction below this lake level, and the EA are to implement this from 1 April 2022 [NE2 para4.1.2]. The surrender of the Over Water abstraction licence would therefore bring substantial benefits to the Over Water SSSI, and this again is an element of the compensatory measures package [CD1.26 secn2.1 P10] Whilst NE has identified these abstraction cessation benefits, the EA agrees that the Thirlmere option would give greater protection and result in improvement to several local waterbodies. This would be in line with the Water Framework Directive ambitions of the EA [EA4 para4.3.2] In view of all of these points, whilst the UU submission to Ofwat may not have adequately justified the pipeline capacity, I am satisfied that, in terms of the EiP, the capacity has been adequately justified Objections and concerns in relation to the implementation of the Thirlmere option have also been submitted by third party organisations and individuals as follows At the Security of Supply Hearing, Mr Barnes, a local resident, expressed concerns that the revocation of the Ennerdale abstraction licence could be due to the possibility of nuclear waste being stored in West Cumbria. The EA and UU however responded that the decision on revocation had been taken solely on the basis of HRA considerations. From the evidence submitted to the EiP, I am satisfied that this has been the case At the Ehen River Environment Hearing, Mr Siddall, another local resident, expressed concerns that the consideration of the health of mussel beds was 15

16 not an exact science and that their health is naturally subject to a cyclical effect. He then went on to submit that the suggested decline was somewhat nebulous and could be generic and influenced by other factors. I accept, as do UU and the statutory bodies, that the understanding of the mussel population is not an exact science. I do however consider that there is convincing evidence, in an HRA context, that the River Ehen mussel population is in decline Mr Siddall referred to another mussel site in Cumbria, thereby questioning the significance of the River Ehen in this regard. The EA however advised that the population at this other site was far smaller and therefore of much less significance than that at the River Ehen Mr Siddall also suggested that the expenditure on the Thirlmere transfer option generated profit for UU and that a deeper intake could provide a greater level of River Ehen compensation flow at far less cost but that this would result in less profit. The cost estimates for the Thirlmere option have been satisfactorily justified in relation to this stage of the project, and the decision to favour the option has been taken with these costs in mind. Whilst Ofwat have some concerns over the extent of the project in relation to the River Ehen, it also provides other environmental benefits in terms of the cessation of abstraction in other sensitive areas. I am therefore satisfied that, for the purposes of the EiP and at this stage in the project, that the capital expenditure for the Thirlmere pipeline option is justified. In relation to the provision of a deeper intake to obtain additional compensation water, additional compensation water would not return the River Ehen to its natural state, which is necessary to return the SAC to a favourable condition. It therefore does not represent a long term solution that would be acceptable in HRA terms Mr Carr, a local resident, referred to some of the points made by Mr Siddall but also suggested that poachers had contributed to the decline of the mussel population. Whilst poaching is of course a risk to the population, there has been no evidence put to me to suggest that poaching is a problem, and I therefore do not identify it as a contributor to the decline Mr Carr added that insufficient water quality assessment had been undertaken to rule poor water quality out as a contributor to the decline. The EA is of the view however that water in the River Ehen is generally of excellent quality [CD2.1 secn5.5.6]. Whilst higher phosphate and nitrate levels have been recorded in the river, land acquisition and other measures within the compensatory package are being taken to reduce these. I am therefore satisfied that an adequate assessment of water quality has taken place and that appropriate remedial action is being taken in terms of water quality Mr Carr also suggested that further abstraction from Thirlmere would exacerbate the currently low levels at the reservoir. UU however were of the view that the increased abstraction would not reduce levels by any significant extent compared to the current abstraction regime, and I cannot see anything that would suggest otherwise EiP written representations were also made in response to the notification of the Hearings as follows. Windermere Town Council suggested that the 16

17 EiP should seek specific actions in relation to the protection of Windermere lake levels [WTC1]. Windermere and Thirlmere lie within the UU IRZ, which includes both Manchester and Liverpool and extends from the Lake District to the Peak District. There is sufficient available capacity within the IRZ to offset any additional Thirlmere demand [UU4 para ]. There is also a high degree of connectivity within the IRZ, and this would allow Windermere abstractions and the lake level to be satisfactorily regulated and balanced in conjunction with any additional Thirlmere demand. I am therefore satisfied that there is no evidence that the Thirlmere option would have a detrimental effect on Windermere lake levels, and the matter is therefore outside the scope of this EiP Blindbothel Parish Council sought clarification of which body would decide that the 300m expenditure on the Thirlmere option was justified [BPC1]. Whilst UU is responsible for water supply in West Cumbria within the relevant legislation, it fulfils this responsibility within a WRMP that has to be directed to be published or amended, by the SoS. This EiP is part of the process by which the SoS considers the plan. In terms of the progression of the Thirlmere option, there is nothing in this EiP to suggest that it is not a reasonable outcome of the proper process The Friends of the Lake District expressed concerns over the impact of the Thirlmere option on the surrounding landscape [FLD2]. Following the implementation of the Thirlmere pipeline, the total abstraction would however still be within the licensed quantities and lake levels in a dry year. Moreover, lake levels would not be as low as they historically have been due to a lower demand and improved connectivity throughout the IRZ [CD1.8 secn3.5]. The pipeline route would also be positioned alongside features such as roads to reduce landscape impact and the proposed water treatment works has now been relocated outside the Lake District National Park area [CD1.7b secn2.2.1]. Furthermore, the concern over landscape harm from the Thirlmere option is not shared by the relevant statutory bodies, and I can see no reason to disagree The Friends of the Lake District also expressed concerns in respect of the option to utilise the Cogra reservoir. This is however an unlikely source under any scenario and one which would require a comprehensive environmental assessment Mr & Mrs Mawdsley expressed concerns in relation to the pipeline crossing watercourses and private water supplies and the adequacy of consultation [MAWD1]. Whilst the project is at an early stage, I am satisfied that the appropriate procedures would be put in place as the project progresses due to the regularity with which UU has to undertake projects such as this [UU4 para ] Various representations were received in response to the initial dwrmp [EA1 BACH1]. As a result of the above considerations, I am satisfied that, for the purposes of this EiP, there is sufficient evidence to justify the investment proposed in relation to the WCRZ in the revised dwrmp and associated measures. In terms of flood risk, at Thirlmere it is not intended that there would be any changes to the flood management operational rules [UU4 table1]. On the River Ehen, with the Ennerdale Water weir removed, there would be a very minor flood risk benefit [CD2.1 secn8.5]. 17

18 3.42 In relation to demand management measures, I am content that they appear to be reasonable, sufficient and achievable [UU4 table1]. I have considered concerns in relation to Windermere lake levels, and in effect therefore their impact on flows from the lake, in response to the EiP written representation from Windermere Town Council, as above. Other matters were raised in these representations, but they lie outside the scope of this EiP In view of the submitted evidence and all of the above points, including options in relation to the contingency plan, I am satisfied that UU has considered all of the options available. I am also satisfied that the Thirlmere option represents the most appropriate preferred option to be identified within the revised dwrmp. There is therefore no need to identify any replacement for the option at this stage, as any future replacement would be addressed in terms of the contingency plan previously considered in this report. Additions to the Thirlmere Option to Reduce Reliance on Ennerdale Water Abstraction Earlier 3.44 The Thirlmere option comprises a single pipeline route from a source at Thirlmere to satisfy a demand at a new water treatment works in the WCRZ. The option therefore is not divisible, and there is no evidence of any elements of the option that could be advanced to reduce reliance on Ennerdale Water abstraction earlier. Furthermore, there are no suggested additions to the pipeline or the water treatment works that would reduce this reliance Measures have been identified that would reduce this reliance, but these are not physically or geographically related to the Thirlmere option. These measures are set out in the progressive abstraction reduction measures as described in Section 4 of this report. 4. PROGRESSIVE REDUCTION OF RELIANCE ON ENNERDALE WATER ABSTRACTION IN ADVANCE OF THE THIRLMERE OPTION 4.1 Further work has been carried out since the publication of the revised dwrmp in relation to the progressive reduction of Ennerdale Water abstraction. The associated reports have included an HRA Stage 3 Alternative Option Appraisal [CD1.43] and an Update on Ennerdale Abstraction Reductions [CD1.12]. Current Abstraction Regime from 2012/ In 2012/13, various measures were implemented to reduce abstraction from previous levels [UU4 para & fig6]. These followed a freshwater mussel stress event in 2012 [UU4 para ]. The River Ehen is subject to relatively low and constant, or flatline, river flows during the summer period. This is due to the nature of the compensation flows that are required to be discharged past the weir that impounds Ennerdale Water, at the head of the River Ehen. In the summer of 2012, artificial spates or freshets were artificially added to these low flatline river flows. It became apparent however that, instead of improving river flows by introducing some natural variation in them, the unnatural increases in river flow 18