Research and analysis

Water and sewerage companies in England: Environmental Performance Assessment (EPA) metric guide

Published 2 October 2020

Applies to England

The Environment Agency introduced the Environmental Performance Assessment (EPA) in 2011 as a tool for comparing performance between the water companies and across years.

This document provides guidance on each of the EPA metrics. It explains the detail and importance of each metric. We set targets for each metric that align with the 5 year Asset Management Plan (AMP) investment cycles for water companies to make improvements and meet our expectations. The AMP6 period ran from April 2015 to March 2020. Our EPA targets apply to calendar or financial years and currently measure performance within the period January 2016 to March 2021.

Please refer to the environmental performance of the water and sewerage companies annual reports for the EPA and wider regulatory information.

1. EPA metric status and performance star rating

We set targets for each EPA metric. Company performance is then given a red, amber or green (RAG) status:

• red - performance significantly below target
• amber - performance close to or slightly below target
• green - performance better than target

Based on performance across all of the metrics, EPA star ratings are then applied to each water company. Our expectation is that all companies achieve a 4 star rating.

EPA performance star rating descriptions for the period 2016 to 2021

EPA star rating (out of 4)	Star rating description
★★★★	Industry leading company
★★★☆	Good company
★★☆☆	Company requires improvement
★☆☆☆	Poor performing company

Table note: ‘2016 to 2020’ for EPA means 2016 to 2020 for calendar year metrics and financial years ending 2017 to 2021 for financial year metrics.

EPA performance star rating descriptions for the period 2011 to 2015

EPA star rating (out of 4)	Star rating description
★★★★	Industry leading company
★★★☆	Above average company
★★☆☆	Below average company
★☆☆☆	Poor performing company

Table note: ‘2011 to 2015’ for EPA means 2011 to 2015 for calendar year metrics and financial years ending 2012 to 2016 for financial year metrics.

2. Total pollution incidents (sewerage) metric (category 1 to 3)

2.1 What this EPA metric means

This metric is for how many category 1 to 3 sewerage pollution incidents from a water company asset were reported to us in a calendar year. The number of pollution incidents is normalised per 10,000km of sewer length for which a water company is responsible so we can compare across the sector.

EPA thresholds for normalised incidents (per 10,000km sewer) for the 5 calendar years 2011 to 2015:

• red is ≥130
• amber is <130 and >50
• green is ≤50

EPA thresholds for normalised incidents (per 10,000km sewer) for the 5 calendar years 2016 to 2020:

• red is ≥50
• amber is <50 and >25
• green is ≤25

2.2 Sewerage pollution incidents

We record and investigate reports of pollution caused by discharges or escape of contaminants from water company sewerage assets, including:

• combined sewer overflows
• foul sewers, including private sewers transferred to the water companies in October 2011 (used in the EPA for 2016 onwards)
• other water industry premises
• pumping stations
• rising mains
• sewage treatment works
• surface water outfalls

A category 1 incident has a serious, extensive or persistent impact on the environment, people or property and may, for example, result in a large number of fish deaths.

Category 2 incidents have a lesser, yet significant impact.

Category 3 incidents have a minor or minimal impact on the environment, people or property with only a limited or localised effect on water quality.

We assess impact according to the:

• persistence (time)
• extent (area affected)
• seriousness of effects

Effects of pollution include harm to:

• amenity
• aquatic life
• drinking water abstraction
• ecology
• fisheries
• human health

2.3 Importance of this metric

Discharges or escape of a contaminant from water company sewerage assets can cause environmental harm/pollution of surface waters or groundwater. We want water companies to reduce their impact on the environment and reduce the number of pollution incidents they cause.

2.4 What we expect from water companies

We expect water companies to minimise all pollution incidents (category 1 to 3). Our expectation for the period 2015 to 2020 is for at least a third reduction in annual numbers compared to 2012. We expect all companies to achieve ‘green’ status for this metric by 2020. This is equivalent to 25 or less pollution incidents per 10,000km of sewer length.

3. Serious pollution incidents (sewerage) metric (category 1 and 2)

3.1 What this EPA metric means

This metric is for how many serious category 1 and 2 sewerage pollution incidents from a water company asset were reported to us in a calendar year. The number of serious pollution incidents is normalised per 10,000km of sewer length for which a water company is responsible for so we can compare across the sector.

EPA thresholds for normalised serious incidents (per 10,000km sewer) for the 5 calendar years 2011 to 2015:

• red is ≥4
• amber is <4 and >1.5
• green is ≤1.5

EPA thresholds for normalised serious incidents (per 10,000km sewer) for the 5 calendar years 2016 to 2020:

• red is ≥1.5
• amber is <1.5 and >0.5
• green is ≤0.5

3.2 Serious pollution incidents

We record and investigate reports of pollution caused by discharges or escape of contaminants from water company sewerage assets, including:

• combined sewer overflows
• foul sewers, including private sewers transferred to the water companies in October 2011 (used in the EPA for 2016 onwards)
• other water industry premises
• pumping stations
• rising mains
• sewage treatment works
• surface water outfalls

A category 1 incident has a serious, extensive or persistent impact on the environment, people or property and may, for example, result in a large number of fish deaths.

Category 2 incidents have a lesser, yet significant impact on water quality.

We assess impact according to the:

• persistence (time)
• extent (area affected)
• seriousness of effects

Effects of pollution include harm to:

• amenity
• aquatic life
• drinking water abstraction
• ecology
• fisheries
• human health

3.3 Importance of this metric

Discharges or escape of a contaminant from water company sewerage assets can cause environmental harm/pollution of surface waters or groundwater. We want water companies to reduce their impact on the environment and reduce the number of serious pollution incidents they cause.

3.4 What we expect from water companies

We expect water companies to reduce serious pollution incidents (category 1 and category 2). Our expectation for the period 2015 to 2020 is that serious pollution incidents must trend towards zero by 2020 with at least a 50% reduction compared to 2012. We expect all water companies to achieve ‘green’ status for this metric by 2020. This is equivalent to 0.5 or less serious pollution incidents per 10,000km of sewer length.

4. Discharge permit compliance metric

4.1 What this EPA metric means

This metric is for the percentage of sewage treatment works (STW) and water treatment works (WTW) that are compliant with the water quality limits in their discharge permits.

EPA thresholds for percentage permit compliance for the 5 calendar years 2011 to 2015:

• red is ≤96
• amber is >96 and <99
• green is ≥99

EPA thresholds for percentage permit compliance for the 5 calendar years 2016 to 2020:

• red is ≤97
• amber is >97 and <99
• green is ≥99

4.2 Discharge permit compliance

Water companies require an environmental permit to discharge waste water from STW and WTW to surface water or to ground. This metric measures the number of permitted sites that each water company has and the number that are compliant in a calendar year. The permit conditions included in this metric are for discharge sampling requirements and discharge numeric quality limits.

4.3 Importance of this metric

We set permit conditions to prevent discharges causing environmental harm/pollution. We measure and report the percentage of sites that are compliant with their discharge permit conditions. We want water companies to reduce their impact on the environment by operating fully within the conditions of their permits.

4.4 What we expect from water companies

It is a statutory obligation for water companies to comply with their permits. Our expectation for the period 2015 to 2020 is that companies have a plan in place to achieve compliance at 100% of sites. We expect all companies to achieve ‘green’ status for this metric by 2020, which is equivalent to compliance at 99% or more of their sites.

5. Self-reporting of pollution incidents metric

5.1 What this EPA metric means

This metric is for the percentage of category 1 to 3 pollution incidents self-reported by a water company.

EPA thresholds for percentage of incidents self-reported for the 5 calendar years 2011 to 2015:

• red is ≤37
• amber is >37 and <68
• green is ≥68

EPA thresholds for percentage of incidents self-reported for the 5 calendar years 2016 to 2020:

• red is ≤55
• amber is >55 and <75
• green is ≥75

5.2 Self-reporting of pollution incidents

Self-reporting is when a water company reports a pollution incident from one of their assets to us before a member of the public or third party does. This metric measures the percentage of pollution incidents from both sewerage and clean water supply assets that were self-reported to us in a calendar year. It applies to incidents that we have assessed as having a minor, significant or major (category 1 to 3) impact on the water environment.

5.3 Importance of this metric

Self-reporting of pollution incidents enables water companies to react quickly to reduce the impact and learn lessons to prevent future incidents. We encourage water companies to use telemetry and other technologies to manage their assets and improve self-reporting.

5.4 What we expect from water companies

Our expectation for the period 2015 to 2020 is that water companies have high levels of self-reporting. We expect all companies to achieve ‘green’ status for this metric by 2020, which is equivalent to at least 75% of water company incidents being self-reported.

6. National Environment Programme (NEP) delivery metric

6.1 What this EPA metric means

This metric is for the percentage of planned NEP schemes, investigations and monitoring completed. Only measures to improve water quality were included in this metric for the year April 2015 to 2016. For the years onwards measures to improve water resources, fisheries, biodiversity and geomorphology have also been included.

EPA thresholds for percentage of NEP plan complete in each of the 5 financial years ending 2012 to 2016:

• red is ≤96
• amber is >96 and <99
• green is ≥99

EPA thresholds for percentage of NEP plan complete in each of the 5 financial years ending 2017 to 2021:

• red is ≤97
• amber is >97 and <99
• green is ≥99

6.2 The NEP

In 2014 the economic regulator Ofwat set the prices that water companies could charge their customers between 2015 and 2020. As part of that price review each water company developed an NEP. These set out the environmental measures each company needed to invest in and complete during the 5 year AMP6 investment cycle (April 2015 to March 2020) to ensure they meet European and national environmental standards related to water.

The measures include asset improvement schemes and investigations and monitoring designed to improve:

• water quality
• water resources
• fisheries
• biodiversity
• geomorphology

6.3 Importance of this metric

The NEP sets out the environmental measures that the water companies need to take to improve the water environment. Each financial year, we measure the cumulative number of NEP schemes delivered as a percentage against the whole 5 year plan. This means we can assess if water companies are making improvements as planned. We want companies to improve company infrastructure and deliver other required actions so that the impact of providing clean water and wastewater services is reduced.

6.4 What we expect from water companies

Our expectation for the period 2015 to 2020 is that water companies deliver their environmental improvement schemes as planned. We expect all companies to achieve ‘green’ status for this metric by 2020, which is equivalent to at least 99% of the NEP being delivered on time.

7. Sludge disposal and use metric

7.1 What this EPA metric means

This metric is for the percentage of overall tonnes of dry solids sewage sludge production that is disposed of or used in a satisfactory manner.

EPA thresholds for percentage sludge compliant for the 5 calendar years 2011 to 2015:

• red is ≤98
• amber is >98 and <100
• green is 100

EPA thresholds for percentage sludge compliant for the 2 calendar years 2016 to 2017:

• red is ≤98
• amber is >98 and <100
• green is 100

7.2 Sewage sludge

Sewage sludge is a product of wastewater treatment. The majority of sludge is treated before being used in agriculture.

7.3 Importance of this metric

The metric measures the satisfactory disposal or use of sewage sludge produced by the companies. We record and report the amount of sludge (tonnes of dry solids) that is disposed of or used in compliance with relevant environmental laws. These include the Sludge (Use in Agriculture) Regulations (SUiAR) and the Environmental Permitting (England and Wales) Regulations (EPR). Sludge use in ‘agriculture’ is allowed under the SUiAR. Sludge ‘recovered’ includes non-agricultural land reclamation, compost, or other purposes permitted under EPR. Sludge can also be ‘disposed’ of at dedicated sites, by incineration, power generation/gasification and landfill.

Reporting also includes water company voluntary compliance with a Safe Sludge Matrix. We want water companies to comply with sludge regulations to maximise the benefit and reduce the environmental impact of sludge.

7.4 What we expect from water companies

We set out our expectation for the period 2015 to 2020 as 100% satisfactory disposal or use of sludge produced. We expected all companies to achieve ‘green’ status for this metric by 2020. However, starting with the 2018 calendar year, we suspended the metric from the EPA whilst we reviewed our regulatory regime for sludge treatment, storage and use. We have now published our Environment Agency strategy for safe and sustainable sludge use.

8. Security of Supply Index (SoSI) metric

8.1 What this EPA metric means

This metric is for how the actual water available for supply compares to forecast dry year demands.

EPA thresholds for SoSI in each of the 5 financial years ending 2017 to 2021:

• red is <99
• amber is ≥99 and <100
• green is 100

8.2 SoSI

The SoSI is a measure of the actual water available for supply in the reporting year compared to forecast demand in a dry year. Each company should achieve an index of 100 if they are providing a secure supply of water.

8.3 Importance of this metric

Water companies produce an annual review of their water resource management plans. These compare forecasts of demand and supply under dry year conditions and calculate a target headroom to protect customer supply. Where actual headroom is less than target headroom (SoSI below 100) this means there was a risk in maintaining a secure supply of water.

8.4 What we expect from companies

Our expectation for the period 2015 to 2020 is that water companies maintain a secure supply of water to their customers. We expect all companies to achieve ‘green’ status for this metric with a SoSI score index of 100.

9. Event Duration Monitoring (EDM) delivery

Each company has been funded through their NEP to install EDM on the vast majority of their storm overflows. This does not form part of the EPA NEP delivery metric.

Storm overflows include:

• combined sewer overflows (CSOs) on the sewerage network
• storm discharges at sewage pumping stations
• inlet CSOs at STW
• storm tanks at STW

10. EPA review

Every 5 years we review how we report on water company environmental performance and review the EPA. We are currently reviewing reporting and the EPA for 2021-2025 data years. We intend to strengthen and broaden the reporting and EPA to focus water companies on better environmental performance.

We set out our expectations and company legal obligations before a business planning cycle starts. This enables companies to build requirements into their plans for investment, as regulated by Ofwat, the economic regulator of the water companies. For 2020-2025 we set out our performance expectations for 2020-2025 in the Water Industry Strategic Environmental Requirements (WISER) in October 2017. We do not generally review the EPA more often than every 5 years, as we wish to keep the targets the same for the 5 year period to enable comparison to be made on a consistent baseline, for the period of investment within their business planning process with Ofwat.

11. Our regulation of water companies

We regulate and work in partnership with the 9 water and sewerage companies (called water companies here) that provide clean (drinking) water and waste water (sewerage) services in England, to ensure they:

• protect and improve the environment
• minimise the environmental impact of their assets and activities
• deliver good performance and share good practice
• comply with licences and permits designed to protect people and the environment

Water companies provide an essential public service that underpins the social and economic health of the nation. We expect them to minimise the impact of taking clean water from the environment and returning used water after treatment. Individually and collectively, however, these activities can and do affect the ecological health of rivers and their catchments. They also affect how water can be used downstream by others. It is the role of the Environment Agency to regulate this work.

By far the greatest potential environmental impact from the water companies’ activities is on the water and land environment. To regulate this impact, water companies have:

• abstraction licences which allow them to take water from the environment
• water discharge activity and groundwater activity permits which allow them to put treated waste water back into the environment
• permits or other regulatory controls which allow them to dispose of, or use, sludge or other waste
• duties to manage their impact on flood and coastal risk and the environment

The licences and permits we issue control the level of impact water companies are allowed to have on the environment. It is vital that they meet the conditions we set in their licences and permits and meet their legal obligations.