Ofwat to assume high spill rate from unmonitored storm overflows at PR24

Ofwat plans to introduce strong incentives for sewerage companies to ensure their storm overflow Event Duration Monitors (EDMs) are installed and working at PR24.

In a letter defining the storm overflow performance commitment (PC) at the next price review, Ofwat said

"The PC (and associated financial incentives) will be based on a company's average spills each year – the number of spills divided by the number of storm overflows. In line with 2018 guidance produced by the Environment Agency, the number of spills will be counted using the '12/24' method. Each spill that lasts longer than 12 hours as more than one spill, with each additional 24-hour period counted as one additional spill. Ofwat provided the example of a 60 hour spill: this would be counted as three spills – one spill of 12 hours and two spills of 24 hours. All spills will be relevant, including those within the terms of discharge permits.

"An unmonitored overflows adjustment will apply where EDMs are not installed or not working. This will assume 50 spills, far more than the median average of 13 and mean average of 25 spills per overflow. Ofwat will apply a time-based consideration – for example, if a monitor works for 50% of the time, the company would be required to assume 25 spills for when it was not monitored. Ofwat explained: “While this approach risks overstating the level of spills from a company's storm overflows, we consider this is outweighed by the benefits of providing a strong incentive on companies to consistently monitor their storm overflows in the first place.”

It added the approach was needed because:

"100% of overflows are required to be monitored by the end of this year. At December 2022, the overall coverage was 91% but some companies were way off that “such as Thames Water (62%) and Anglian Water (68%).

"Based on companies' annual returns, Ofwat estimated that companies' monitors worked 92% of the time over 2022, with some working much less – for instance, 8% of Severn Trent’s monitors worked less than half of the time."

Elsewhere in the letter, Ofwat proposed that the number of storm overflows within scope can change during the period, and that new reporting requirements relating to emergency overflows (for use, for instance, during a power failure) will be separate from the storm overflows PC. Stakeholders were invited to comment by 23 May, and Ofwat plans to update the definition in June.