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Portsmouth Water business plan sees the company requesting £347 million in total expenditure – an increase of £130 million when compared the current period.
The figure comprises £45 million of spending on water resources, £273 million on the company’s water network and £29 million on its household retail activities.
It notably excludes investment in the new Havant Thicket reservoir.
The company said average annual bills would rise by 19% in real terms by end of AMP8 from £107 currently to £128 by the final year.
Portsmouth said its key investments would include £75 million of expenditure on smart metering and £33 million to improve water quality, including through the installation of ultra violet and nitrate treatment. The company has proposed to spend £10 million to reduce leakage by 16%.
Some £7 million is being invested in upgrading IT systems with the aim of being the first “fully smart” water company by 2035.
Spending under the Water Industry National Environment Programme (WINEP) includes enhancement investment of £4 million on an investigation of catchments to determine its future water supply strategy.
In contrast to a number of companies that have warned Ofwat their plans will be unfinanceable undern the regulator’s current view of cost of capital, Portsmouth said the recognition of the higher cost of debt faced by small companies meant its plan is deliverable. It noted a recent injection of £170 million of new equity into the business
The company has however proposed an alternative cost of capital for the Havant Thicket Reservoir, which “reflects the specific quantum and timing of debt recently issued to deliver the project”. The cost and outcomes of the project were agreed under PR19 and updated at the start of this year.
Portsmouth said it was evolving delivery models so it has the “capabilities, people, supply chain and delivery partners in place ready to deliver from 2025” and said market testing had begun.
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