PC10

Our first price control determination for NI Water was PC10.  PC10 was published in February 2010. This challenged NI Water to operate with lower costs while improving levels of performance.

The PC10 determination set out the overall revenue requirement for NI Water over the three-year period 2010-13. The money the company receives enables it to deliver priorities for consumers and water quality and environmental improvements for the lowest reasonable cost. At the same time, the determination resulted in savings to consumers of around £91 million over the three years.

Following agreement of the PC10 final determination and a subsequent review of capital budgets, we asked NI Water to provide a Monitoring Plan for PC10. The plan describes the outputs the company will deliver in the three-year period. It outlines the company’s overall strategy and its commitments in five areas of importance to customers:

•drinking water quality and environmental improvements,
•service to consumers,
•maintaining serviceability,
•delivering sustainable services, and
•improving information.

After we issued our final determination for PC10, NI Water’s ability to deliver all of the outputs envisaged in the final determination was affected by an underspend of the capital budget in 2010/11, real cuts in the 2012/13 capital budget, and constraints on its approach to capital procurement. This resulted in some changes to the PC10 outputs which were agreed through a change control process with the relevant stakeholders. We continued to monitor the performance of the company through our Annual Information Returns and published our annual Cost and Performance Report to keep consumers informed on the delivery of the PC10 outputs.