Leakage is an important issue for customers and the environment. In our view reducing leakage is not only economically justifiable – reducing operating costs and capital expenditure – but also contributes to Scottish Water delivering its obligations with regard to sustainable development, and reducing its carbon emissions.
Since 2006, we have agreed with Scottish Water pragmatic annual targets to reduce leakage continually so that it achieves the point where the cost saving of reducing leakage is equal to the economic cost of the water lost. This is known as the economic level of leakage.
We are pleased to report that Scottish Water beat the agreed leakage targets for the three years 2008-09 to 2010-11. This was in spite of severe winter weather conditions in the last two years. As a result, leakage is now over a third lower than its level of five years ago.
In our final determination we said that we expected Scottish Water to reduce its leakage by over a third again, but for this to have no upward impact on costs.