1) As a project always has the potential for both positive and negative external effects ,
United Utilities seeks to quantify these to help select the best overall decision from its range of option.
The following sections show the basis for such decisions relating to the Millom project.
These include the costing criteria and how the options specifically met stakehoder needs.
2) The original budget for the Millom project was set at £ 14.5m.
However, this was before a full evaluation of the social costs was carried out.
Having consulted with the Environment Agency, United Utilities aimed to identify the best possible
solution for its shareholdera, the environment, local communties and other stakeholder needs.
The key considerations were:
1. the initial capital outlay of the project (capex)
2. the ongoing operating expenditure from running the project (opex)
3. the wider costs and benefits to the environment and other stakeholders.
4) All possible solutions when costed out were over the original budget.
Therefore the partners in the plan engaged in a cost-benefit analysis to identify which of the three
option put forward gave the best return against all factors.
5) The whole-life cost assessment of the solutions involved examining capital costs of consrtuction
(e.g. concrete structures, pumps and pipe work) as well as operating costs - e.g. power and
chemicals for treatment.
Although option 1 had a significantly lower initial capital outlay, originally united Utilities had
discounted option 1 and 3 s the application of the technology was to the company and
the regulator, so more data was needed to accept the solution.
This only left option 2, despite it being the most costly and potentially having a negative impact
on the environment.
6) However, United Utilities found positive evidence from colleaques at Welsh Water to demonstrate
how the ultraviolet treatment processes could be used effectively.
It then worked closely with the Environment Agency to ensure the project minimised the negative external costs
and maximised the external benefits.
This resulted in united Utilities adopting option 1 as the most innovative, cost-efferctive and environmentally
beneficial option that in some way satisfied all stakeholders.
The key reasons were:
- It had the lowest capex and whole-life cost - the infrastructure for option 1 can be contained within
the existing waterworks/treatment works site.
- Its carbon footprint and environmental impact was lowest - it minimises the use of concrete and construction waste.
- When storms and heavy rain occur the excess water is treated with ultraviolet discharged into the estuary.
This eliminates strong odours that would have affected the local community and delivers benefits to
the shellfish and bathing waters.
7) In a public service industry like water, gas or electricity, it is essential to make investment decisions that respect
the requirements of many different stakeholders.
United Utilities sought to find a solution that met with commercial criteria, met budget and also minimised
negative impacts on the community.
By working closely with the Environment Agency, United Utilities was able to come up with a socially and
environmentally acceptable solution.
In terms of satisfying stakeholders, United utilities considered (and by selecting option 1)
fulfilled the following key requirements:
1. Convinced its own shareholders that the decision was good in terms of financial criteria and maintaining
the excellent reputation of the company.
2. Convinced the Environment Agency that wastewater would be treated to the required standards so that
the EU directives could be met in this area of the North West.
3. Demonstrated to landowners that their land rights would be respected and that huge areas of land would not
be taken away from them.
4. Provided fishermen and consumers of shellfish with good quality stocks and supplies.
5. Provided swimmers with bathing waters that are of a high standard.
8) The table below summarises the financial and environmental impacts considered as part of the investment
appraisal in order to assess the overall impact of the three options.
This clearly shows how option 1 provided the most effective balance of commercial and environmental factors.
9) United Utilities is a major partner in the economic life of the North West.
It manages huge reservoirs such as Thirlmere and Haweswater in Cumbria and treats the wastewater from homes
and businesses across the North West before disposing of it safely back to the environmentted, through
investments, to providing sustainable solutions to business and environmental challenges.
The company recognises that quality management begins at the water production process and continues right
down to safe dischrge and continues right down to safe discharge of wastewater.
United Utilities keeps its catchment land as clean and sustainable as possible.
10) In the Millom project, United Utilities was faced with a number of drivers requiring better water management
to meet consumer needs, legislation and environmental demands.
It responded by identifying three alternative options and then working with the Environment Agency to identify
the solution which offered the best value for money and long term sustainability.
11) The use of cost-benefit analysis meant that chosen solution minimised finalcial costs and limited the impact
on the local landscape whilst giving acceptable benefits to shareholders, the local community and the environment.
1) As a project always has the potential for both positive and negative external effects ,
United Utilities seeks to quantify these to help select the best overall decision from its range of option.
The following sections show the basis for such decisions relating to the Millom project.
These include the costing criteria and how the options specifically met stakehoder needs.
2) The original budget for the Millom project was set at £ 14.5m.
However, this was before a full evaluation of the social costs was carried out.
Having consulted with the Environment Agency, United Utilities aimed to identify the best possible
solution for its shareholdera, the environment, local communties and other stakeholder needs.
The key considerations were:
1. the initial capital outlay of the project (capex)
2. the ongoing operating expenditure from running the project (opex)
3. the wider costs and benefits to the environment and other stakeholders.
4) All possible solutions when costed out were over the original budget.
Therefore the partners in the plan engaged in a cost-benefit analysis to identify which of the three
option put forward gave the best return against all factors.
5) The whole-life cost assessment of the solutions involved examining capital costs of consrtuction
(e.g. concrete structures, pumps and pipe work) as well as operating costs - e.g. power and
chemicals for treatment.
Although option 1 had a significantly lower initial capital outlay, originally united Utilities had
discounted option 1 and 3 s the application of the technology was to the company and
the regulator, so more data was needed to accept the solution.
This only left option 2, despite it being the most costly and potentially having a negative impact
on the environment.
6) However, United Utilities found positive evidence from colleaques at Welsh Water to demonstrate
how the ultraviolet treatment processes could be used effectively.
It then worked closely with the Environment Agency to ensure the project minimised the negative external costs
and maximised the external benefits.
This resulted in united Utilities adopting option 1 as the most innovative, cost-efferctive and environmentally
beneficial option that in some way satisfied all stakeholders.
The key reasons were:
- It had the lowest capex and whole-life cost - the infrastructure for option 1 can be contained within
the existing waterworks/treatment works site.
- Its carbon footprint and environmental impact was lowest - it minimises the use of concrete and construction waste.
- When storms and heavy rain occur the excess water is treated with ultraviolet discharged into the estuary.
This eliminates strong odours that would have affected the local community and delivers benefits to
the shellfish and bathing waters.
7) In a public service industry like water, gas or electricity, it is essential to make investment decisions that respect
the requirements of many different stakeholders.
United Utilities sought to find a solution that met with commercial criteria, met budget and also minimised
negative impacts on the community.
By working closely with the Environment Agency, United Utilities was able to come up with a socially and
environmentally acceptable solution.
In terms of satisfying stakeholders, United utilities considered (and by selecting option 1)
fulfilled the following key requirements:
1. Convinced its own shareholders that the decision was good in terms of financial criteria and maintaining
the excellent reputation of the company.
2. Convinced the Environment Agency that wastewater would be treated to the required standards so that
the EU directives could be met in this area of the North West.
3. Demonstrated to landowners that their land rights would be respected and that huge areas of land would not
be taken away from them.
4. Provided fishermen and consumers of shellfish with good quality stocks and supplies.
5. Provided swimmers with bathing waters that are of a high standard.
8) The table below summarises the financial and environmental impacts considered as part of the investment
appraisal in order to assess the overall impact of the three options.
This clearly shows how option 1 provided the most effective balance of commercial and environmental factors.
9) United Utilities is a major partner in the economic life of the North West.
It manages huge reservoirs such as Thirlmere and Haweswater in Cumbria and treats the wastewater from homes
and businesses across the North West before disposing of it safely back to the environmentted, through
investments, to providing sustainable solutions to business and environmental challenges.
The company recognises that quality management begins at the water production process and continues right
down to safe dischrge and continues right down to safe discharge of wastewater.
United Utilities keeps its catchment land as clean and sustainable as possible.
10) In the Millom project, United Utilities was faced with a number of drivers requiring better water management
to meet consumer needs, legislation and environmental demands.
It responded by identifying three alternative options and then working with the Environment Agency to identify
the solution which offered the best value for money and long term sustainability.
11) The use of cost-benefit analysis meant that chosen solution minimised finalcial costs and limited the impact
on the local landscape whilst giving acceptable benefits to shareholders, the local community and the environment.
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