The Environment Agency has called for the upcoming AMP6 price review round for water company business plans to include better interconnectivity between the utilities.

Giving evidence to the current Environment Food and Rural Affairs Parliamentary Committee inquiry into the  Government’s Water White Paper, Lord Chris Smith, Chairman of the Environment Agency said:

“We are very keen to see the next price review round for the water companies include provision for much better interconnectivity between different water company areas and different catchments.”

“It seems to us that it is one of the ways in which we can try to address the problems of imbalances of water availability across the country, and potentially a much more cost-effective way of doing it than creating a national grid for water, which some have occasionally demanded, and which would involve huge expense and cost in order to pump water from one end of the country to the other.”

“Making sure that they are able to move water around relatively easily, both within water company areas, within their own patch, but also between different water company areas, has to be a crucial part of the next price round.”

His comments came in response to a question as to whether the Environment Agency would have published an overview of interconnection options before planning begins for the next round of water resource management plans in 2014. He was also asked whether the Agency would undertake a cost-benefit analysis of the different approaches to interconnection - for example by contrasting the cost of local interconnections with the costs of establishing a national grid.

Lord Smith said the Agency would want to continue to develop the analysis and anticipated some imaginative proposals coming from the water companies themselves. He described United Utilities’ recent proposal to run a pipe alongside the high-speed rail link as a “bit of kite-flying by (which) was an ingenious way of tackling a planning problem but might not necessarily be the best way of moving water very long distances."

Lord Smith was unable to provide the Committee with any indication of  what the cost of the interconnections might be, confining himself to saying that the answer would depend on where, how many and which companies were "really keen" to undertake it. Dr Leinster, the Agency’s Chief Executive said that the costs would depend on the individual circumstances which would be key work for the individual companies themselves to carry out.

Lord Smith added that it should be work that thewater companies carried out over the course of the next two years leading up to the price review, because any capital expenditure that they would need to have in place over the next five-year period would need to be included within the price review.