Delivery Plan

Transcription

1 Delivery Plan March 2010

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3 Foreword As we conclude the period, we are pleased that Scottish Water is being recognised for the successful delivery of significant service improvements and further efficiencies during the last four years. This is testament to the dedication and commitment of all our staff and supply chain partners. Therefore it is with confidence that we set out our plan for the next five years to deliver further improvements to customer service while at the same time reducing customers bills in real terms. Achieving this plan will enable Scottish Water to progress considerably towards its vision - to become Scotland s most valued and trusted business, one that we can all be proud of. Foreword In our investment programme will be smaller than in the period, at around 500m per annum. This will enable more efficient delivery of the programme than before, in particular because of the early start to investment that is being made to support greater continuity of investment delivery across regulatory periods. Although the final determination efficiency targets are challenging, we are determined to deliver significant further improvements for our customers and out-perform the final determination. Any financial out-performance will enable us to increase the value of the financial reserve and reduce the risk to customers from unforeseen prices shocks, from a business that manages significant risks across its asset portfolio. The Board will closely monitor these risks and the delivery against this plan, ensuring that management incentives are set to maximise the likelihood of out-performance. Ronnie Mercer Chairman 1

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5 Contents 1. Executive Summary Our Vision Serving: always delivering a positive customer experience... 6 Overall Performance Assessment...6 Serviceability measures and improvements...7 Low pressure improvement...9 Malodour improvements...10 External flooding Growing: always seizing opportunities to add value Meeting requirements of new demand...12 Strategic Asset Capacity Development Plan (SACDP) and Section 29E opportunities Responsible: always doing the right thing for Scotland Providing high quality water...14 Protecting and enhancing our environment...19 Flood risk management...24 Leakage...24 Climate change and adaptation...25 Additional outputs to be specified by OMG...27 Q&SIIIb seven stage process...28 Q&SIIIb/IV capital expenditure summary...29 Q&SII/IIIa objectives completion Leading: always shaping our future Issues for consideration in Q&SIV...32 Continuity of investment...33 Metering pilot...35 Developing the regulatory framework...36 Development of the retail market in Scotland Committed: always proud to deliver Our people...37 Capital delivery strategy...37 PFI...38 Health and Safety...39 Operational performance Strong: always financially robust Financial overview...41 Financial projections...44 Financial out-performance Managing risk and uncertainty Financing risks...52 Investment uncertainty...53 Risk management Monitoring performance Commission monitoring...55 Output monitoring Glossary of terms Appendices Contents 3

6 Executive Summary 1. Executive Summary Our vision is to be Scotland s most valued and trusted business, one that we can all be proud of. While achieving this vision extends well beyond 2015, in delivering this plan we will make substantial progress towards achieving this vision. The purpose of this delivery plan is to set out how we will deliver the Ministers objectives for the period within the financing allowed from the final determination of charges, and the timescales and milestones for the delivery of these improvements. We have developed detailed plans to deliver all the improvements set out in this plan. In respect of all the defined outputs to deliver the Ministers objectives, we plan to deliver, and achieve regulatory sign-off of, all of these outputs within the period except water quality mains rehabilitation which requires a 12 month period of post-completion operation before regulatory sign-off can be achieved. Although we plan to deliver all the currently defined outputs within the period, in the event that, during the period, some projects are delayed due to third party actions, we will seek to accelerate delivery of other outputs. We expect that some of the currently undefined outputs, which will be financed from the 180m Output Monitoring Group investment allocation, will, in conjunction with the Q&SIV enhancement start early and ongoing capital maintenance, provide an adequate level of continuity of investment delivery across regulatory periods. We aim to out-perform the determination in each area, although the prospects for out-performance vary considerably between these areas. In particular we believe that the capital efficiency targets underlying the final determination are challenging. We will strive to generate sufficient out-performance from our annual income and expenditure to achieve net out-performance of the final determination, after taking account of the risks associated with achieving the necessary capital efficiencies and managing the capital programme during a period of price volatility. 4

7 2. Our Vision Our vision is to be Scotland s most valued and trusted business, one that we can all be proud of. While achieving this vision extends well beyond 2015, we will make substantial progress towards this ambition by the end of the period. This document sets out the investment and improvements that we will deliver over the period, which will contribute to providing high quality water, protecting and enhancing our environment and supporting Scotland s communities and economy. Our Vision We have set out six aspirational pillars that will support the achievement of our vision, over the longer term, and enable delivery of the required improvements in the period, and these are: SERVING Always delivering a positive customer experience GROWING Always seizing opportunities to add value RESPONSIBLE Always doing the right thing for Scotland LEADING Always shaping our future COMMITTED Always proud to deliver STRONG Always financially robust 5

8 Serving 3. Serving: always delivering a positive customer experience In achieving our vision, we aspire never to disrupt the lives of customers, always delivering a high quality service and a leading customer experience. Our customers have told us that the minimum service acceptable to them is a safe, reliable supply of water that is aesthetically acceptable, at a pressure that will support the use of modern appliances with minimal service interruptions. They want their wastewater taken away, treated and returned harmlessly to the environment without presenting a flooding risk to customers properties because of hydraulic capacity limitations. Overall Performance Assessment While we aim to deliver a minimum guaranteed service to all customers, we will improve overall customer service, as measured by the Overall Performance Assessment (OPA), as required by Ministers in their objectives as shown below. Ministers Direction Improve services to customers, such that by , standards are comparable with the upper quartile performance achieved by the industry in England and Wales in as measured by the Overall Performance Assessment. Thereafter [Scottish Water] shall maintain that level of performance. In the final determination, the Commission confirmed the requirement that Scottish Water should achieve an OPA score in the range of by 2013/14, and that performance should be maintained above 380 in 2014/15 and subsequent years. Our expected profile of underlying OPA service improvement to meet Ministers requirements is set out in Figure 3.1, but it is important that the forecast OPA score is seen in the context of a continuing improving trend until we have completed the delivery of the Ministers enhancement objectives. 6

9 OPA Points Serving Figure 3.1: OPA Improvement plan annual forecast performance Serviceability measures and improvements As well as improving OPA performance, Ministers require also the achievement of serviceability standards as shown below. Ministers Direction As a minimum ensure that standards of services provided to customers across all areas of Scotland are maintained at the levels required to be achieved at March 2010 as required by The Scottish Water (Objectives for 1st April 2006 to 31st March 2010) Directions 2005; In addition to the measures contained within the Overall Performance Assessment, ensure that the following standards are achieved: A reduction in the total number of telephone contacts relating to drinking water quality relative to the position reported by the Drinking Water Quality Regulator in his annual report for the year 2009; A reduction in the number of Unsatisfactory Intermittent Discharges on its network from the reported position in June 2008 and, notwithstanding the level of churn, maintain an underlying trend of overall reduction; Maintenance of the level of compliance at wastewater treatment works; An improvement on the Overall Satisfaction Level in as measured by the customer service questionnaire relative to those results reported in ; A reduction in the number of "second-tier" complaints referred to Waterwatch Scotland relative to the position reported by Waterwatch Scotland in its Annual Report; Creation and maintenance of a register of all properties affected by external sewer flooding. Overall serviceability improvement forecast Table 3.1 below summarises the expected performance over the period against the Ministers key serviceability indicators. 7

10 Serving Water service Directions requirement Forecast March 2010 Forecast March 2015 % of compliant water supply zones for iron (calendar year) 83% 90.2% 96.5% % of compliant water supply zones for manganese (calendar year) 94% 93.6% 96.3% Number of microbiological failures at WTW (calendar year) Inadequate pressure - Properties below reference level at end of year (excluding exclusions under Water (Scotland) Act 1980) 10,707 2, Unplanned supply interruptions - more than 12 hours unplanned 15,759 5, Mains burst per 1000 km Wastewater service Number of properties at risk of internal flooding 1, Number of properties internally flooded due to other causes 1,270 1,270 1,270 Number of WwTW discharges failing numeric consents Number of unsatisfactory intermittent discharges [813] Number of pollution incidents arising from the sewerage service (categories 1, 2 and 3) Customer service and experience Number of second tier complaints referred to Waterwatch Scotland n/a 121 Improvement in the overall satisfaction level as measured by the customer service questionnaire Reduction in total number of telephone complaints relating to drinking water quality n/a 78% Below 121 Above 78% n/a tbc 3 March 2010 Below level Table 3.1: Serviceability indicators expected performance by March 2015 On some serviceability measures, performance will be maintained at current levels. On other measures, performance will improve due to the investment and improvements being undertaken to improve water quality or environmental performance, as set out below and in section 5. We will improve service through: improved operational management and effectiveness, focusing on reducing failures and the frequency of repeat failures at assets. improving the monitoring and control of assets by using asset performance data to target operational resources and capital maintenance investment, thereby reducing further the risk of service failure This figure is uncertain due to the impacts of the extreme weather conditions experienced in December 2009 and January 2010 This figure is dependent on the outcome of the seven stage process and studies which may reduce or increase the number of outputs to be delivered and the number of known unsatisfactory discharges. This figure will not be published until August 2010

11 investing in an intelligent operational control centre to respond more quickly and effectively to actual or potential service failures as further set out on pages 39 and 40, investment in our assets to secure robust compliance or remove historic service deficiencies, and investment to enhance assets which are incapable of meeting the service levels required. Serving Customer satisfaction Through improved service delivery and putting customers at the heart of everything we do, we expect to improve the overall satisfaction level, as measured through the customer service questionnaire from the current level of 78%, and reduce the number of second tier complaints referred to Waterwatch Scotland relative to the position reported in 2008/09. We aim to provide the target level of service, set out in our revised Code of Practice 4, at all times to all customers, but recognise that we do not fully achieve this goal. Where there is any failure in our service, we will focus on achieving first time resolution of problems. Where we consistently fail to provide the minimum level of service under normal operating conditions, customers will receive an appropriate rebate of their charges, up to a maximum of 1,000. Compensation under a revised Guaranteed Standards of Service scheme will continue to be provided to customers inconvenienced for transient failures in service. Service to licensed providers and developers We have established an account management framework for licensed providers as well as operational service arrangements tailored to their requirements and the retail market arrangements. The account management framework includes regular account reviews with each licensed provider and an annual survey to gather structured feedback on our services. This interaction and feedback provides input to the account plan for each licensed provider, focusing on areas identified for improvement. We will continue to adopt a similar account management approach with developers to improve our service to the house building community. Low pressure improvement Ministers require a reduction in the number of properties subject to inadequate water pressure as set out below. 4 Customer standards code in accordance with Section 26 of the Water Industry (Scotland) Act

12 Serving Ministers Direction A reduction in the number of properties subject to low pressure so that by a general position whereby customers should not remain on the inadequate pressure register for a period longer than the minimum necessary to resolve the problem is established. Our planned investment to meet the Ministers objectives will reduce the number of properties remaining on our low pressure register to a churn level of around 240 properties. That is the level at which we will remove properties as quickly as possible after they are added to the register, typically within one year. Malodour improvements The Ministers objectives support measures to minimise odour nuisance at Dalmarnock and Seafield WwTW. Ministers Direction Scottish Water shall take all measures to minimise odour nuisance at Seafield wastewater treatment works in line with the Odour Improvement Plan agreed with Edinburgh City Council. To support the 2014 Glasgow Commonwealth Games, Scottish Water shall take measures to minimise odour nuisance at Dalmarnock wastewater treatment works in line with the Odour Improvement Plan agreed with Glasgow City Council. Seafield WwTW odour improvement We will improve the level of odour control at Seafield WwTW as required by the City of Edinburgh Council under the terms of the Sewerage Nuisance (Code of Practice) (Scotland) Order We are delivering this required improvement through an amendment to the Seafield PFI contract. The benefit of this investment will be to reduce longstanding complaints regarding odour at Seafield WwTW from the local residents. We aim to achieve this by summer 2011 through the upgrading of the inlet works area and covering the weirs to the primary settlement tanks and treating the odorous gases collected from these areas. Dalmarnock WwTW odour improvement We will invest to reduce malodour from Dalmarnock WwTW in accordance with an odour improvement plan to be agreed with Glasgow City Council. 10

13 External flooding External flooding from overloaded sewers is an increasing customer service improvement priority. We will gather the required data to provide information to stakeholders that will inform the policy options for future investment plans. In the period we will continue to address external flooding where it is associated with internal flooding of other properties. Serving 11

14 Growing 4. Growing: always seizing opportunities to add value In achieving our vision, we aim to always use our assets and investment opportunities in a way that adds value to Scotland and grows our value and reputation. In support of this aim, we will work with licensed providers and developers to meet the requirements of new demand in the most efficient way taking innovative approaches to drive value and improve service. Meeting requirements of new demand Scottish Water has a key role in supporting the sustainable economic growth of Scotland, as confirmed by Ministers below. Ministers Direction To support the Government's purpose of increasing sustainable economic growth, Scottish Water shall: (a) maintain and improve a web-based facility to enable developers and licensed providers to check the available strategic capacity for any location in Scotland; (b) establish a plan, for the period 1 April 2010 to 31 March 2020, to provide new strategic capacity to meet all new housing development and the domestic requirements of commercial and industrial customers; (c) Publish annual information (where available) outlining the capacity of the network and relevant network costs, including the nature and impact of current development plans, which allows developers and those wishing to engage in Section 29E consent activity to identify opportunities. The content of this information is to be agreed each year with the Commission; In the period, we will continue to provide strategic capacity 5 to meet all new housing development and the domestic requirements of commercial and industrial customers. To minimise the likelihood of creating redundant assets, Ministers require that investment in strategic assets is undertaken in support of committed development where the developer confirms, as a minimum, the following: a) The developer has ownership or control of the land; b) The development is supported by the local plan and has full planning permission; 12 5 Strategic capacity is defined as capacity at part 4 strategic assets such as raw water intakes, water impounding reservoirs, water pumping stations and aqueducts and water and wastewater treatment works.

15 c) The time remaining on the current planning permission is sufficient for development to progress; d) Plans are in place to mitigate any network constraints that will be created by the development through a minute of agreement with Scottish Water; and e) The developer s proposals, in terms of annual build rate within the approved development, are reasonable in the economic circumstances. We will examine demand management options, including Section 29E opportunities (where non-household retail customers would undertake activities that reduce Scottish Water s overall costs), further leakage reduction and supply rezoning, as well as providing additional strategic asset capacity to meet the needs of emerging demand. Where we are required to provide additional strategic capacity we will take account of predicted future demand to Growing As investment will be driven primarily by developer demand, should there be a significant upturn in the economy, the investment requirements may ultimately exceed the financing provided in the final determination, and set out in Table 4.1 below. In these circumstances, we will seek additional financing 6 to ensure that we can support sustainable economic growth in Scotland. In accordance with the final determination, our investment plans assume that 25m of the income raised from infrastructure charges will be invested in providing strategic network reinforcement to meet the wider growth in demand. m (2007/08 prices) 2010/ / / / /15 Total Strategic capacity Reasonable cost contributions Strategic network reinforcement Total Table 4.1: Forecast growth related investment Strategic Asset Capacity Development Plan (SACDP) and Section 29E opportunities Our SACDP has been developed on the basis of a simple risk matrix taking into account our knowledge of the assets and the potential impacts on the receiving waters as agreed with SEPA through the Memorandum of Understanding. The final determination included additional allowances to further improve and support our SACDP and for the investigation of Section 29E opportunities. We will work with licensed providers, developers and the Commission to implement measures that will support the identification of opportunities to reduce costs to customers and developers alike, and achieve more sustainable outcomes. 6 the allocation of the unspecified investment, the logging process or interim determination (draft determination page 24) 13

16 Responsible 5. Responsible: always doing the right thing for Scotland In achieving our vision, we aim to fully address the social, economic and environmental impacts of all we do to ensure we are a sustainable business contributing to a sustainable Scotland. We have engaged closely with the Scottish Government, the Drinking Water Quality Regulator for Scotland (DWQR) and the Scottish Environment Protection Agency (SEPA) to ensure that the Ministers objectives support this aim and allow us to contribute to Scotland s carbon and renewable energy targets. Section 10 of this delivery plan sets out the expected timescales for delivery of the outputs that will achieve the Ministers objectives. Providing high quality water Q&SIIIb drinking water quality enhancement objectives Ministers Direction In line with the Cryptosporidium (Scottish Water) Directions 2003 and regulation 4 of the Water Supply (Water Quality) (Scotland) Regulations 2001, seek to ensure that public drinking water supplies do not contain any micro-organism, parasite, or substance at a concentration or value that would constitute a potential danger to human health; Undertake studies to determine to the extent possible the location and number of lead communication pipes in Scottish Water's ownership and establish a long term plan for the removal of these pipes; Undertake the opportunistic removal of lead pipes associated with other quality and maintenance programmes and carry out customer requested removal of lead communication pipes and replacements that might result in future sample fails in accordance with regulations; Cryptosporidium removal As agreed with DWQR we will address 45 water treatment sites that have had more than one failed cryptosporidium sample to date, in accordance with the Ministers objectives. At 33 sites we expect to deliver treatment solutions using micro or nanofiltration, or other appropriate treatment depending on the levels of colour and turbidity occurring in the raw water sources. At the other 12 sites we expect to provide water from other existing supplies. 14 Once these 45 sites are improved during , there will remain a further 32 sites that have had fewer than two detections of cryptosporidium but which do not have robust treatment processes to prevent cryptosporidium occurrence in

17 drinking water supplies. We will continue to monitor all our water supply systems as part of our drinking water safety plans and, if appropriate, we will seek the DWQR s endorsement for any further enhancement to treatment to protect against the risk of illness to the public Lead regulation compliance The maximum permissible concentration value for lead in water supplied at customers taps will reduce from 25µg/l to 10µg/l from December To meet the 2013 deadline, we will provide treatment at 10 sites to reduce the levels of lead in the water supply for 12 zones, and in 52 small zones (with less than 1000 properties) remove the lead communication pipes. Lead communication pipe survey During we will undertake studies to determine, to the extent possible, the location and number of lead communication pipes in Scottish Water s ownership (currently estimated at 700,000). We will establish with DWQR and the Scottish Government the potential for a long term plan for the removal of these pipes that integrates with addressing lead in customers plumbing and supports a more sustainable water industry, including the removal of orthophosphoric dosing at our water treatment works (WTW). Responsible Lead communication pipe replacement Regulations oblige us to replace the lead communication pipe to customers premises should they both request it and renew their own service pipe. We expect to address up to 5,000 such customer requests in the period. In addition we will replace lead communication pipes when we are rehabilitating our water mains network for other quality or serviceability reasons, and our rehabilitation techniques make it practicable to do so. We estimate that this may result in around 15,000 lead communication pipes being replaced opportunistically. Other water quality parameters We will deliver enhanced treatment at 6 sites to reduce the levels of manganese, coliforms and aluminium in our customers water supplies. In the period the voluntary initiative at Forehill WTW, to promote the reduction of pesticide use within the catchment to the benefit of the public water supply, will be reviewed. In the event that this approach is determined to be unsuccessful, additional investment will be requested through the Output Monitoring Group (OMG) to provide an appropriate treatment solution at Forehill WTW. 15

18 Responsible Disinfection control improvements Ministers Direction Improve the taste and odour of public drinking water supplies in Scotland by ensuring that all water supplies with a Disinfection Index score of greater than 60 at the start of the investment period have a score of less than 20 by the end of the period; We will invest to improve 34 WTW sites to achieve a disinfection index of 19 or below through the provision of new or additional chlorine dosing, mixing, contact and control equipment and instrumentation. Raw water supplies Ministers Direction Fulfil its duties as a "Relevant Person" under regulation 4 of the Private Water Supplies (Scotland) Regulations 2006 in respect of those properties currently supplied from Scottish Water's raw water mains; The introduction of the Private Water Supplies (Scotland) Regulations 2006 has resulted in Scottish Water being identified by Unitary Authorities as the relevant person for a small number of non-public water supplies; typically these are properties supplied from raw water aqueducts. The Regulations require compliance with the same water quality standards that are used to regulate the public water supply. We will improve the quality of 5 type A private supplies that serve 44 properties. We will also provide for micro treatment systems for up to 50 type B supplies to meet the relevant person duty resulting from the 2006 Regulations. Network iron, manganese and turbidity quality enhancement Ministers Direction Commence a programme of water mains rehabilitation, to be agreed with the Drinking Water Quality Regulator, that will reduce the risk of water quality being degraded by the condition of the distribution system when in steady state flow conditions. Undertake studies in water supply zones to determine, as far as possible, the extent of water mains rehabilitation required to reduce the number of discolouration events and customer contacts; 16 We will undertake a mixed programme of activities including 2,392km of mains flushing, 563 km of mains swabbing, and 1,577km of mains relining or replacement to remove iron and manganese deposits from these pipes. This will directly address many of the most common customer complaints, including

19 dirty water and iron staining of laundry, and will contribute to improved water quality performance for around 950,000 people. In addition to the water mains rehabilitation investment included in this plan, we will undertake studies in 143 zones to determine the necessary investment to reduce iron and manganese in distribution in future investment periods. Q&SIIIb drinking water quality protection Ministers Direction As regards water quality protection, Scottish Water shall:- Install backflow prevention devices at waste water treatment works to comply with Scottish Water's Water Byelaws The number and location of these devices are to be agreed with Drinking Water Quality Regulator; Establish a Water Safety Plan, as promoted by the World Health Organisation, for all public drinking water supplies in Scotland; and Provide raw water sampling points at the locations specified by SEPA and DWQR. Responsible While drinking water quality monitoring at customers taps consistently demonstrates greater than 99% compliance, the risk of water quality failure exists throughout all water supply systems from source to tap. To reduce this risk we will invest: in the installation of pipework and equipment to prevent backflow at 275 wastewater treatment works to achieve compliance with the water byelaws; to deliver a further 174 Drinking Water Safety Plans, achieving coverage for the whole of Scotland s public water supply; and to provide appropriate raw water sampling points at 230 locations as agreed with DWQR and SEPA. 17

20 Responsible Q&SIIIb drinking water security of supply objectives Ministers Direction As regards security of supply, Scottish Water shall: Provide an appropriate level of physical security to Security Service standards and improve provision in the event of an emergency to take account of the requirement of the local response plan as agreed with the Scottish Government and the Drinking Water Quality Regulator; and Provide the necessary improvements to provide a level of service in water supply zones, to be agreed with the Drinking Water Quality Regulator, such that these zones are protected against conditions that have a probability of a 1 in 40 year return period. Security Service standards Major interruptions to supply require the transfer and distribution of bulk supplies of water using road tankers. To improve our ability to supply drinking water under such circumstances, as required under security guidance, we will construct 14 fixed bulk water tanker filling manifolds across Scotland. We will also invest to provide increased physical security to meet the latest Security Service standards. This will improve protection at 590 assets. Secure supply of wholesome water We aim to achieve the standards of: hosepipe bans being imposed, where appropriate, before a drought order is implemented; drought orders being required no more frequently than once every 40 years for a WRZ; and standpipes or rota cuts being considered only under extreme drought conditions. However, we have identified water supply deficiencies, which would not otherwise be resolved in , in the level of service for 32 water resource zones (WRZ). For the 15 largest zones, we will improve the supply demand balance to improve security of supply for over 800,000 customers. This will also achieve an overall service level of band B performance under the OPA measurement of security of supply. Investment to improve security of supply, for all but the Loch Maree zone, will be undertaken in accordance with the seven stage process, to allow further investigation of the extent of need in each zone and fully evaluate the opportunities for addressing any supply deficit through leakage control and demand management opportunities. 18 Our forecast improvement profile is as shown in Table 5.1.

21 2010/ / / / /15 Security of supply index Table 5.1: SOSI improvement profile By 2015 there will remain 17 zones with supply demand deficit, serving around 61,000 customers, which will be proposed for consideration in the Ministers objectives for Additional investment to create a greener water industry We support the measures included within the final determination to support a more sustainable water industry in Scotland. In our plan we will undertake research and development work to identify sustainable and cost effective solutions for tackling cryptosporidium. We are working with DWQR to agree the pilot work that we will undertake. Responsible We will also identify and operate sustainable land management approaches in five water catchments to be agreed with stakeholders. We also welcome the Commission s allowance for an incentive to developers to adopt water efficiency measures in new and refurbished housing. We will pursue opportunities with developers and local authorities regarding more sustainable approaches to development, including grey water utilisation. Protecting and enhancing our environment Q&SIIIb improving the quality of the water environment Investment to support Glasgow Commonwealth Games Ministers Direction Improve the water and aesthetic quality of surface waters currently affected by sewage and debris discharges from sewer networks so supporting the 2014 Glasgow Commonwealth Games. This objective will address the needs in the catchment surrounding the Commonwealth Games venues, with reference to our obligations regarding internal and external property flooding from overloaded sewers and the intermittent discharges to rivers. To support the success of the 2014 Glasgow Commonwealth Games we have included investment to address known external flooding to 92 properties. Our base maintenance plan includes investment to maintain the internal property flooding register at the level achieved in March 2010, and we will address any internal property flooding from overloaded sewers affecting the Commonwealth Games area under that objective. 19

22 Responsible Urban Waste Water Treatment Directive Ministers Direction Improve the quality of wastewater treatment works discharges to meet the Urban Waste Water Treatment (Scotland) Regulations 1994 as specified by SEPA; Improve water and aesthetic quality to ensure compliance with the Urban Waste Water Treatment Directive for surface waters currently affected by sewage and debris discharges from sewer networks, as specified by SEPA. To comply with the Urban Waste Water Treatment Directive (UWWTD) we will provide enhanced treatment to the four existing discharges into Loch Ryan and install secondary treatment at Airth WwTW. We will also extend the sewerage systems in Ardbeg and Port Bannatyne to collect discharges from 13 existing raw sewage outfalls and at Stromness to collect discharges from 6 existing raw sewage outfalls. In addition to the secondary treatment plants to be constructed, we will install ferric dosing and alkalinity correction processes to reduce final effluent phosphorus concentrations at 21 WwTW. To reduce discharge volumes and spill frequencies, and improve the aesthetic quality, at 19 unsatisfactory intermittent discharges (UIDs), we will either provide additional sewer system capacity or relocate discharge points, as appropriate, along with the appropriate screening and monitoring equipment. The Freshwater Fish Directive Ministers Direction Improve the quality of wastewater treatment works discharges to ensure compliance with the environmental standards required under the Freshwater Fish Directive in the designated waters as specified by SEPA; Improve water and aesthetic quality to ensure compliance with the Freshwater Fish Directive of surface waters currently affected by sewage and debris discharges from sewer networks as specified by the regulator. Regarding sewer networks affecting the quality of the River Clyde and Clyde Estuary, these improvements should only be undertaken where they do not prejudice the long term strategic treatment and network solution [to be confirmed through strategic study to be completed by end of 2012/13] but should, in any case, ensure that adequate performance is maintained within the existing infrastructure; The Freshwater Fish Directive (FFD) requires reductions to the concentration of Biological Oxygen Demand (BOD) and ammonia within the final effluent. Wherever this driver requires reduction in the ammonia concentrations, the Water Framework Directive (WFD) may also apply, but with a tighter standard. 20

23 We will invest at 37 WwTW to provide nitrifying filters and/or improved activated sludge processes to achieve these new standards. At Cartland WwTW, we have agreed with SEPA that we will trial low carbon technology to determine the potential capability of this technology as a more sustainable solution to help improve discharge quality. In networks we have two different problems which require investment to address: (a) isolating surface and foul sewers in dual manhole systems to improve 46km of water bodies; and (b) reducing discharges at 118 UIDs in Glasgow, either through providing additional sewer system capacity or relocating the discharge points, as appropriate, together with provision of appropriate screening and monitoring equipment. Responsible The Shellfish Waters Directive Ministers Direction Improve sewer networks and wastewater treatment works discharges to ensure compliance with Regulation 6 of The Surface Waters (Shellfish) (Classification) (Scotland) Regulations 1997 to move towards, and where possible meet the guideline standard specified in Schedule 1 of the same, that affect shellfish harvesting and production areas, as specified by SEPA The Shellfish Waters Directive requires improvement to both the continuous discharges at wastewater treatment works and intermittent discharges within sewer networks. We will invest at four UIDs, either to provide additional network capacity or to relocate the discharge points, as appropriate, together with the provision of appropriate screening and monitoring equipment. We will invest to provide enhanced treatment to four existing discharges into Loch Ryan. 21

24 Responsible The Water Framework Directive and Dangerous Substances Directive Ministers Direction Improve the quality of wastewater treatment works discharges to meet discharge licence standards for Biological Oxygen Demand and/or ammonia to enable waters, as specified by SEPA, to meet the water quality standards as derived from the Water Framework Directive; Improve the quality of surface waters by reducing discharges of oils and other chemicals from contaminated surface water drains as specified by SEPA to meet the requirements of Article 1 of the Dangerous Substances Directive and the Water Framework Directive; Improve sewer networks to ensure compliance with the Water Framework Directive for surface waters currently affected by sewage and debris discharges from sewer networks as specified by SEPA. Regarding sewer networks affecting the quality of the River Clyde and the Clyde Estuary, these improvements should only be undertaken where they do not prejudice the long term strategic treatment and network solution [to be confirmed through strategic study to be completed by end of 2012/13] but should in any case ensure that adequate performance is maintained within the existing infrastructure; The WFD can require improvements for all the recognised sanitary licence parameters within the final effluent discharge linked to the quality, alkalinity and altitude of the receiving water, and the WFD requirements are generally significantly tighter than the existing standards that we are currently required to achieve. We will provide improved biological treatment and tertiary filtration to reduce ammonia and/or BOD concentrations at 24 wastewater treatment works. In networks we will improve discharges from 82 UIDs by either providing additional sewer system capacity or relocating the discharge points, as appropriate, together with provision of appropriate screening and monitoring equipment. To meet our requirements under the Dangerous Substances and WFD we will improve surface water outfall discharges from six industrial estate collection systems through improved catchment management and treatment as appropriate. This will help to protect watercourses from accidental spillages that occur within the industrial estates. 22

25 Enhancement Sludge Investment Ministers Direction As regards the management of waste products associated with drinking water and sewage treatment, Scottish Water shall: Develop and maintain a strategy for the sustainable and cost-effective disposal of waste products; and Improve sludge management facilities to meet the requirements of the Safe Sludge Matrix at two sludge treatment centres. Following public consultation, as part of a Strategic Environmental Assessment, we have developed a long-term strategy for the recycling and disposal of sludge from wastewater and water treatment sites. The aim of the strategy is to achieve the maximum value from sludge as a product for use on land or as a fuel source through regional specific approaches, whilst monitoring any changes to the available land bank to manage the long term risks to the strategy. We are not required to make any immediate change in sludge disposal practice other than at two sites where improved sludge management facilities are needed to meet the requirements of our waste management licence. In the period, we will therefore continue to: Responsible Maximise the use of the Private Finance Initiative (PFI) contracted disposal routes, including treatment and disposal via land and incineration at Longannet Power Station or the proposed new biomass plant at Longannet; and Maximise the disposal to land of sludge treated by us in accordance with the Safe Sludge Matrix. To achieve safe disposal to land in accordance with our waste management licence, we will invest to improve the sludge treatment facilities at both Perth and Dunfermline sludge treatment centres. Compliance with CAR licence requirements Ministers Direction Reduce the risk of discharge compliance failures at existing wastewater treatment works, pumping stations and other network assets where the physical assets are not capable of reliably meeting the terms of existing discharge licence conditions as issued by SEPA under the Water Environment (Controlled Activities)(Scotland) Regulations 2005; and Ensure compliance with the SEPA's requirements for flow monitoring and event recording at specified assets as required in licences under the Water Environment (Controlled Activities)(Scotland) Regulations

26 Responsible We will install the necessary additional equipment to ensure the existing licence conditions can be met reliably at 25 wastewater treatment works. We will invest to increase pumping capacity or network storage to pass forward greater flows at 23 wastewater pumping stations. SEPA has also identified that it is essential that the flow recording and event monitoring requirements of licences are met to protect the environment from pollution. Working with SEPA we have identified 313 sites (230 network sites and 83 WwTW) at which we will improve compliance with the CAR licence nonsanitary requirements. Flood risk management Ministers Direction Scottish Water shall take all necessary steps to fulfil its duties and obligations required for the period as set out in the Flood Risk Management (Scotland) Act The Act places a duty on Scottish Water through modelling work to better understand flooding from the sewer network, how it interacts with other surface water systems and to provide information to SEPA. To support this requirement we will create five models for catchments, to be confirmed by SEPA, that will identify the operational and future investment requirements in these catchments. We will also work with local authorities on the surface water management component of their Flood Risk Management Plans. We also have a responsibility to mitigate the risk to our services from flooding. Based on recently completed asset risk assessment studies we will invest to reduce the risk of flooding at 26 critical assets. Leakage Ministers Direction Scottish Water shall by 2014 reduce the leakage from its water distribution network to the Long Run Economic Level of Leakage as calculated using the current industry standard. Annual reduction milestones are to be agreed between Scottish Water, SEPA and the Commission. Thereafter it shall maintain leakage at the agreed Long Run Economic Level. In line with Ministers objectives we plan to reduce leakage to the economic level of leakage, as calculated using the current industry standard, by Our Long Run Economic Level of Leakage (ELL) was assessed, on this basis, in December 2009 as 612Ml/day, although this is subject to review and agreement with the Commission. 24

27 The ELL, calculated on this basis, may continue to be revised as better information becomes available, and this will be reflected in subsequent delivery plan updates. We will continue to work with the Regulatory Leakage Group to identify any improved basis for determining the long run ELL for target setting after 2014 and will report total leakage and water into supply. We plan to deliver annual leakage reductions to achieve the currently calculated ELL, as set out in Table 5.2 below, although the annual target for 2010/11 should be reassessed when we understand the current leakage levels following the extreme winter weather in December 2009 / January Annual Leakage (Ml/day as measured by Maximum Likelihood Estimation (MLE)) 2010/ / / / /15 [720] Responsible Table 5.2: Leakage reduction profile Climate change and adaptation We will seek to deliver a lower carbon water service by reducing demand for energy, driving energy efficiency and developing our renewable energy capacity. We will also seek to ensure that our service is resilient to climate change. During the period we will deliver a number of projects to support these strategic aims and the Ministers objectives. Ministers Direction In support of requirements of the Climate Change (Scotland) 2009 Act to reduce carbon emissions by 42% by 2020 and 80% by 2050, Scottish Water shall seek to understand both the impact of climate change on the delivery of its core functions and services, and its contribution to Scotland's carbon emissions. In particular it shall: Take steps to mitigate its carbon emissions by seeking opportunities to reduce energy demand, investing in energy efficiency and increasing, where it is cost effective to do so, its renewable generation capacity; Conduct studies and pilot work to understand how it should, in future investment periods, adapt its future and existing assets and operations to the effects of climate change; and Investigate and improve, where necessary, an integrated approach to catchment modelling including the improved monitoring of rainfall, river and surface water flows in partnership with other agencies. Scottish Water shall prepare a plan by as to how it intends to promote water conservation and water-use efficiency. Thereafter it shall update that plan and report on its implementation in its Annual Report Adapting to climate change Understanding the impact of climate change The latest climate models were launched by the Met Office and the UK Climate Impacts Programme in summer We will use these models to understand 25

28 Responsible the risks to service from climate change, and we will work in partnership with the UK water industry to ensure that we develop best practice tools to assess climate impacts to our services and assets. We will also work with other agencies to gather a more substantive dataset regarding rainfall patterns across Scotland to inform our sewer network and water resources modelling, and establish longer term risks to service. We will undertake strategic studies to identify how we should address climate change risks in future plans for both water resources and our drainage infrastructure. Water resource planning Our water resource plan has a 25 year horizon that allows us to identify, plan and deliver future needs in an affordable manner. The investment in the period will address current supply-demand balance issues and expected growth. During this period, we will ensure that the latest climate models are incorporated into the rolling review of the water resource plan. Water efficiency and metering trials In response to the duty on us to promote water efficiency, we will develop a water efficiency programme to co-ordinate specific actions to raise customer awareness and promote sustainable water use. This will include customer engagement and awareness, but we will also seek to understand how we can encourage more sustainable consumption through the proposed water metering trials. Reducing carbon emissions Mitigating carbon emissions We produce an annual carbon footprint covering all our operational carbon emissions, which allows us to identify where carbon is produced within our business. We will take action to manage and reduce carbon across all parts of our business. We have developed a carbon attainment plan that identifies a number of activities to be undertaken. Energy efficiency The continued focus on tackling leakage will reduce unnecessary water production and pumping. We will promote improved management of energy across all sites, focussing on understanding the specific drivers of energy consumption. Our standards and specifications seek to promote the use of energy efficient equipment, and our research and development programme will continue to target further improvements. 26