On 2 December 2013, we submitted our business plan, covering the 2015–20 period (AMP6), to Ofwat. In building our plan we have taken account of the views of over 27,000 customers and other stakeholders to understand their priorities.

Our Customer Challenge Group has also been extensively involved in formulating research and challenging resulting plans in detail. The result is a plan that we believe strikes the right balance between customer service, the environment and customer bills.

The key features of the delivery plans for each of the four price controls are set out below.

Wholesale water

The North West benefits from one of the youngest water networks in the country, with over 50 per cent of our network constructed or renewed in the last 30 years. This is a consequence of significant investment over previous regulatory cycles to improve water quality. We also benefit from historic investment in the integration of our networks to create a core 'integrated supply zone.' The most recent addition to this was the West–East pipeline running approximately 50 kilometres between Liverpool and Manchester. As a consequence we are able to provide one of the most efficient and flexible water services in the sector.

Customers told us that they wanted to retain their current level of water services, but do not want to pay for water service improvements. This has driven our proposals for AMP6, where our core focus is to continue ongoing maintenance of the existing service to keep it working reliably now and in the future, managing costs carefully and reducing the number of customer contacts.

At Ennerdale Lake in West Cumbria, the Environment Agency's planned withdrawal of our abstraction rights for environmental reasons raises supply and demand balance issues for the local population. After careful evaluation of a number of alternative options in conjunction with the Environment Agency and other stakeholders, we are proposing a preferred solution which has broad support. This will see the development of a new treatment works near Thirlmere and connection of the West Cumbrian supply network to our integrated supply zone. This project is the main capital scheme for our water network.

Key features of our plan include that we will:

  • maintain existing high levels of reliability in the delivery of day-to-day water services, making better use of technology to remotely monitor and control more of our source-to-tap assets;
  • maintain existing high levels of water quality as measured at customers' taps and our water treatment works;
  • reduce the number of contacts from customers regarding water quality;
  • maintain leakage levels at 2014/15 target levels, which are at or below the sustainable economic level;
  • limit the impact to customers of increases in operating costs such as power, chemicals and rates, by making cost savings elsewhere through the continuous improvement in the efficiency of our operations; and
  • commence work to link 150,000 customers in West Cumbria to Thirlmere reservoir to ensure a long-term, reliable supply of drinking water and providing benefits to the environment at Ennerdale.

Wholesale wastewater

The region's geography, the legacy of the Industrial Revolution, population growth and long-term underinvestment in the region's wastewater infrastructure mean that new European environmental legislation has a significant impact on our plans for the next regulatory cycle and beyond. Furthermore, the North West has one of the country's largest combined waste and surface water infrastructures and this has significant implications for river and bathing water quality in the heavy rainfall events anticipated under climate change. These are significant new challenges for our wastewater service and will drive high levels of capital expenditure in meeting statutory obligations.

Against this backdrop, customers told us that for the most part they wanted their wastewater services to remain stable. Whilst they want to see progress in reducing sewer flooding and in improving the environment, they are concerned about the impact that service improvements will have on their bills. We have responded to this by devising a balanced programme of work over AMP6 and beyond that will progressively deliver UK Government compliance with European legislation.

This also takes account of customers' views on the acceptable level of future bill increases.

In AMP6 we will:

  • build on the customer satisfaction improvements we have already delivered. We will continue to improve the way we operate our wastewater business, making better use of technology, automation and control to drive better customer service at reduced cost;
  • reduce the risk of sewer flooding inside customers' properties by 40 per cent, seeking opportunities to work in partnership with others to deliver schemes cost-effectively and promote the use of more sustainable drainage systems;
  • enhance the region's bathing waters and work with other organisations to support them in delivering improvements to our region's beaches;
  • improve the water quality in the North West's rivers and lakes through investment in our treatment works and at overflows, reducing pollution. We are engaging with stakeholders to explore innovative catchment management techniques to control diffuse pollution in our catchments;
  • increase our production of renewable energy from waste to help protect customers from rising energy costs and reduce our carbon footprint;
  • absorb significant additional costs for taking responsibility for all private sewers and private pumping stations across the region. Costs will be constrained through improvements to our operating model and efficient delivery of our programme.

Household retail

Our focus for the current regulatory period has been and continues to be to improve the customer experience. This involves being more proactive with customers, anticipating problems before they materialise and improving our communication channels so that we are easier to do business with. We aim to further reduce the number of complaints and to resolve them whenever we can, avoiding the need for complaints to be referred to the CCW.

We look to reduce the debt burden on the company and its customers by engaging with those who are struggling to pay, helping them to return to sustained payment behaviour. We are extending our options for assistance to hard-pressed customers by developing a social tariff that secures a high level of acceptability from customers. We remain committed to contribute annually to the United Utilities Trust fund, which has proven effective in helping customers in difficulty return to regular payment.

Our domestic retail plan also sees us continuing our efforts to reduce the cost to serve our customers through systems and process improvement. This is particularly important under the new price control methodology which uses an industry average retail cost to serve to determine part of customer bills.

Non-household retail

We welcome the opportunity offered through the opening of the English non-household retail market to competition. Over the last two years we have recruited a management team with other sector experience to lead our business retail area, and separated this team from our domestic retail and wholesale business areas. This team has embarked on a transformation programme focused on getting the basics right against core customer needs, creating the culture of a business-to-business retailer.

Our early progress has been encouraging and our success in growing our United Utilities Scotland business has allowed us to learn about the propositions, processes and systems required to win, serve and retain non-household customers. Research has highlighted a need for a broader range of services targeted to different segments. We are developing these in our non-appointed business ensuring that they are only paid for by customers who want these services.

Planning for 2015-20

Read more about our 2015-20 business plan by visiting our website:

corporate.unitedutilities.com
/ourbusinessplan

Non-household customers tell us that the three most important things they look to their water supplier to deliver are: value for money; a reliable supply; and great customer service. With this in mind, through the course of AMP6 we will:

  • install meters in all business customer premises that give automated meter reads (AMR) to facilitate billing for actual consumption;
  • build stronger relationships with customers to develop tailored plans to meet their needs;
  • give customers greater choice in how they contact and transact with us; and
  • increase first point resolution and case ownership, reducing cost to serve and improving customer satisfaction.

Next steps

In line with the price review process we are scheduled to submit revisions to our business plan on 27 June. Ofwat is scheduled to publish a draft determination on 29 August and a final determination on 12 December 2014.