The regulator has published its final guidance for companies on the AIM, which aims to encourage water companies to reduce the environmental impact of abstracting water at environmentally sensitive sites.
Last month, water firms were slammed by environmental NGOs for being “unambitious” over their proposed number of AIM sites. The total number of sites currently proposed is 47 which the majority of companies argued is “about right”.
Ofwat said it welcomed the suggestion from companies that they would like to add further AIM sites after the mechanism starts in April 2016.
“For abstraction sites added within the financial year companies would need to report on a part-year basis for that financial year,” it said. “A company would need to put its AIM performance in context.
“For example, if a company added a site to the AIM in October for the last six months of the financial year it might compare well to a baseline derived over the whole financial year which includes the typically lower flows in rivers during summer months.”
The AIM is a reputational incentive which seeks to harness a firm’s aspiration, to increase its reputation by demonstrating that it is changing its operating practices in a way that benefits the water environment.
Ofwat said it will collate the companies’ AIM performance on its website, including the contextual information that companies provide, to “enhance its reputational impact”.
The regulator will publish AIM performances after companies have submitted their annual performance reports after July 2017, and will consult with the AIM taskforce on the specific details of how it publishes these performances.
The 13 water companies to which the AIM applies are: Affinity Water, Severn Trent Water, Anglian Water, Southern Water, Thames Water, South East Water, Yorkshire Water, Wessex Water, Sutton and East Surrey Water, South Staffordshire Water, Northumbrian Water, Portsmouth Water and United Utilities.