Utility Regulator issues draft determinations for PC21

Northern Ireland’s Utility Regulator has issued its draft determinations for Northern Ireland Water for consultation, covering the six year period from April 2021 to March 2027.

The draft determinations included:

• operational cost efficiency equivalent to 2.11% per annum compared to 0.78% proposed by the company which saves consumers £73m over the PC21 period;

• a cost of capital of 1.7% (average) over PC21 applied to an RPI indexed regulatory capital value (RCV). This is lower than the company’s business plan and saves £184m in billed revenue; and

• capital investment of £1.7bn which is 11.9% less than the company’s proposals for PC21 but a 74% increase from PC15 – the Utility Regulator said: “This will begin to address the lack of capacity in wastewater systems and address development constraints in 47 areas by the end of PC21”;

• a long-term view of tariffs taking account of the need to limit the increase in RCV as additional investment is made;

• price limits with a weighted average cost increase of zero in real terms but typical bills for unmeasured, non-domestic consumers will rise by 16% (£47) by the end of PC21;

• the introduction of new consumer service measures to drive continuous improvement in service.

The Utility Regulator said: “During the PC21 period, NI Water will begin to address a lack of capacity in its sewerage networks and wastewater treatment works which constrains the planned development of housing and industry which underpins the economy and wellbeing of our society. This will require a stepped increase in investment. Without this investment NI Water will continue to breach statutory environmental obligations and our society to have to choose between environmental protection and economic development.”

Stakeholders have until 16 December to respond.