PC13 final determination summary
| Year | 2012 |
| Published date | 14 December 2012 |
| Energy Sector | Water |
4
Northern Ireland Water fi nal price control
Northern Ireland Water fi nal price control
2013 to 2015 price control fi nal determination: summary
Background
The Utility Regulator’s (UR) role is to promote the interests of water and sewerage consumers and
ensure that they receive best value for money. Through our price control process, we determine
how much revenue NI Water requires in order to be able to deliver water quality, environmental and
customer service objectives at the lowest reasonable overall cost to consumers for a set period of
time. We then set price limits for NI Water in line with this revenue requirement.
This fi nal price control determination (called PC13) sets out our price limits for water and sewerage
services for the two years 2013-15. Our PC13 determination states that NI Water requires £703
million of revenue for the two-year period. This assessment is based on our benchmarking of the
company’s costs and our objective scrutiny of its performance. We have also taken into account the
responses we received to our draft determination consultation (which closed in early November).
Indications are that NI Water will successfully deliver its fi rst regulatory price control, covering
2010 to 2013 (called PC10). This will have saved consumers more than £91 million over the
three-year period. This fi nal determination now challenges NI Water to deliver a saving of £58
million, over the shorter 2013 to 2015 period.
Key benefi ts
Lower charges for consumers - charges will fall by an overall average of 6% below infl ation in both
2013-14 and 2014-15.
Reduction in charges: typical consumer bills (£)
Bills (2012-13 prices)
Actual
12-13
NI Water
13-14
UR
13-14
NI Water
14-15
UR
14-15
NI Water
PC13
saving
UR
PC13
saving
Average notional
household 424 418 400 414 377 16 71
Typical unmetered 273 259 253 247 234 40 59
Typical small metered 382 370 356 357 333 37 75
Typical large metered 3,468 3,356 3,237 3,248 3,022 332 677
Note: The notional household charge is provided as domestic consumers are not billed.
A more effi cient company - for every £1 that comparative water companies in England and Wales
spend in operating their businesses, NI Water spends £1.62. We are challenging the company to
reduce this 38% operational effi ciency gap at a rate of 5% per annum.
Investment in water and sewerage assets - we have allowed for £324 million of prioritised and
targeted investment, maintaining the effi ciency levels in PC10, to deliver specifi ed infrastructure
improvements.
Higher levels of service - an improvement in the overall performance assessment or ‘OPA’ score,
moving from 131 at the start of PC10 to 215 by close of PC13. This will narrow the gap to the
average water company score of 290.
Summary of capital outputs
The table below shows the work programme that NI Water is required to undertake in the years 2013-
14 and 2014-15 to maintain and improve levels of service and to improve compliance with drinking
water quality.
Base maintenance • Investment in the existing assets to maintain levels of service to existing
consumers.
• Completion of planned safety work at impounding reservoirs.
Maintain and enhance
consumer service
• Investment in trunk mains to Newry and Belfast to improve security of
supply.
• Investment in the water distribution network to reduce interruptions to
supply and reduce the number of properties supplied at low pressure by
288.
• Investment in the sewerage network to alleviate the risk of internal fl ooding
at 67 domestic properties.
• Investment in systems and management to improve NI Water’s response to
consumer queries and complaints.
Improve water quality
compliance
• Completion of two water treatment upgrades to secure the quality of
drinking water.
• Continued investment in water distribution mains, to improve the water
quality at the tap, as part of a programme to rehabilitate a further 445 km of
mains.
Improve environmental
compliance
• Investment in 38 wastewater treatment schemes to improve the quality of
discharge from works >250 population equivalent.
• Upgrading of 84 unsatisfactory intermittent discharges to meet quality
standards.
Growth and supply
demand balance
• The company will be able to continue to connect new properties to the
water and sewerage network.
• Investment at sewage treatment works will continue to release development
constraints resulting from a lack of capacity.
Improve sustainability • Improvements to existing assets, levels of service and quality
enhancements, will contribute to a sustainable service.
• Further reductions in leakage will reduce water lost, targeting the
sustainable economic level of leakage (ELL).
• The company will determine a sustainable long run ELL which will inform
leakage targets for PC15.
• The proportion of renewable energy used will increase and energy
effi ciency measures will be implemented.
• NI Water will extend the sustainable catchment management approach it
has developed with stakeholders.
• A drought plan will be prepared to assess how NI Water would respond if
drought conditions were to exceed those planned for in the water resources
management plan.
• NI Water will continue to improve its asset data including water supply area
investigations and drainage area plans.
• Feasibility and development work will be undertaken to ensure the
continuity of output delivery into PC15.
The main fi nal determination report, technical annexes and consultation responses to the draft
determination are all available to view on our website www.uregni.gov.uk
95192-UR Guide.indd 1 13/12/2012 14:06
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