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Ofwat must consult on the environmental impacts before approving the bulk transfer of water between companies, under government amendments to the Water Bill tabled as it passes through the House of Lords.
The bill will make it easier for water companies to transfer water between them. However, there are concerns that this could incentivise water companies to abstract too much water for the purposes of trading. The companies will also have to consult the Environment Agency or Natural Resources Wales when making or changing such arrangements, under the amendments.
Ofwat will also have to consult the Environment Agency when abstractors that are not water companies seek to increase their abstraction. This is designed to stop them capitalising on upstream reform at a cost to the environment.
In a briefing note, the Department for Environment, Food and Rural Affairs (Defra), said: “These safeguards will ensure that there is no practical risk of an unsustainable increase in abstraction as a result of reforms to remove barriers to bulk supplies between water companies.”
The Water Bill will be examined line by line during the Report stage at the House of Lords on March 25.
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