Final Determination of the Mid-Term Review of NI Water’s PC21 Price Control
| Published date | 30 September 2024 |
| Year | 2024 |
| Energy Sector | Water |
Price Control for Northern
Ireland Water
2021-2027
Mid-Term Review
Final Determination
September 2024
About the Utility Regulator
The Utility Regulator is the independent non-ministerial government department responsible for
regulating Northern Ireland’s electricity, gas, water and sewerage industries, to promote the short
and long-term interests of consumers.
We are not a policy-making department of government, but we make sure that the energy and
water utility industries in Northern Ireland are regulated and developed within ministerial policy as
set out in our statutory duties.
We are governed by a Board of Directors and are accountable to the Northern Ireland Assembly
through financial and annual reporting obligations.
We are based at Queens House in the centre of Belfast. The Chief Executive and two Executive
Directors lead teams in each of the main functional areas in the organisation: CEO Office; Price
Controls; Networks and Energy Futures; Markets; Consumer Protection and Enforcement. The
staff team includes economists, engineers, accountants, utility specialists, legal advisors and
administration professionals.
Abstract
Audience
Consumer impact
The Utility Regulator (UR) is the independent economic regulator for water and sewerage
services in Northern Ireland. Our primary role within the water industry is to protect the
interests of consumers, both today and in the future.
PC21 is our current price control for Northern Ireland (NI Water). It runs for the period 2021 to
2027. PC21 ensures the monopoly company - NI Water - who deliver our water and
sewerage services, has enough revenue to operate an efficient business that delivers what
Northern Ireland consumers need. We take account of the Department for Infrastructure’s
(DfI) Social and Environmental Guidance (S&EG) in coming to our price control decisions.
As part of PC21, we allowed NI Water an opportunity to clarify expenditure requirements for
the price control period for costs which were uncertain when we set our PC21 Final
Determination in 2021. This is called the Mid-Term Review (MTR). This Final Determination
sets out our final MTR conclusions, following our assessment of NI Water's MTR submission
and the consideration of the responses that we received to the consultation on the provisional
findings published in our Draft Determination.
We propose an increase in tariffs equivalent to 4.5% in each of the last two years of the price
control period to allow for increases in power costs. We also propose a capital allowance
equivalent to c£2.37bn in 'money of the day' prices (i.e. nominal) for the full price control
period. Some limited adjustments to output targets are also proposed. Our MTR findings will
form the basis for our ongoing monitoring and reporting of NI Water's performance during the
remainder of PC21, through our established Annual Information Return and Cost and
Performance Report processes.
Our MTR process has 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). This piece of work will be undertaken and
concluded separately outside the MTR process, and we will take account of the outcome of
this work as part of the PC21 Outturn Report process.
Principal stakeholders (i.e. Department for Infrastructure, NI Water, Northern Ireland
Environment Agency, Consumer Council for Northern Ireland, Drinking Water Inspectorate),
consumers and their representatives.
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