In its final determination in its Mid-Term Review of Northern Ireland Water’s 2021-27 price control (PC21), the Utility Regulator allowed an operating cost uplift of £54m to cover unexpectedly high power costs. This will be passed through to non-domestic customers in the form of an average tariff increase of 4.5% in each of the last two years of the period.
Elsewhere, the Mid-Term Review proposed limited adjustments to output targets, and allowed an increase in NI Water’s capital allowance for the full price control period, taking this from £2.1bn to £2.4bn to cover inflation. This is to maintain existing services and deliver the upgrades required to meet quality, environmental and service level obligations.
The final determination was largely in line with the Utility Regulator’s draft decision. However, the May 2024 draft determination disallowed NI Water’s application for £0.28bn to cover cost pressures above inflation on grounds of insufficient evidence. This accounted for the bulk of the difference between the company’s capital allowance submission of £2.75bn and the regulator’s £2.4bn allowance.
In its final decision, the regulator said the Mid-Term Review process had identified that some further work is required to establish why some of NI Water’s capital costs are higher than predicted, despite the lack of evidence for cost pressures above inflation (i.e. Real Price Effects). It said this piece of work will be undertaken and concluded separately and outside the Mid Term Review process. It will be taken account of in the next price control as part of the PC21 outturn report process; there will be no further PC21 reopener.
• The Utility Regulator has published a decision on the licence modifications it will introduce to implement a new code of practice (CoP) for consumers in vulnerable circumstances. The objectives are to address gaps in current service provisions; ensure vulnerable customers are identified, adequately protected and receive an appropriate level of support; and ensure practice in Northern Ireland is reflective of exemplars seen in Great Britain elsewhere. The licence modifications affect the water, gas and electricity sectors and come into force on 25 November.
• Northern Ireland’s Department of Finance has appointed Rosamund Blomfield-Smith as chair of the Utility Regulator’s board, replacing Dr Bill Emery. The department has also appointed Isolde Goggin as a new board member, replacing Teresa Perchard. Both started their seven-year terms on 1 October 2024.
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