PC21 Draft Determination

On 30 September 2020, we published our PC21 price control draft determination for NI Water and launched a consultation on our proposals. Our draft determination covers a six year period from April 2021 to March 2027 and was produced following our review and consideration of NI Water’s Business Plan submission and engagement with the water sector principal stakeholders (CCNI, DfI, NIEA and DWI).

Much of NI Water’s business plan and our PC21 draft determination reflects the company’s core business - the operation and maintenance of the water and sewerage network and responding to the needs of consumers. Our price control proposals will allow NI Water to continue to deliver the essential service it provides, at improved levels of efficiency and quality. Additionally, our price control proposals support a sustainable approach to water services including sustainable catchment management, an integrated approach to drainage and a reduction in carbon footprint.

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 will have to choose between environmental protection and economic development.

Our key price control proposals include:

  • The introduction of new consumer service measures which will drive continuous improvement in service.
  • 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 RCV. This is lower than the company’s Business Plan and saves £184m in billed revenue.
  • Capital investment of £1.7bn which is 11.9% less than the company’s proposals for PC21 but a 74% increase from PC15. This will begin to address the lack of capacity in wastewater systems and address development constraints in 49 areas by the end of PC21.
  • A long term view of tariffs taking account of the need to limit the increase in regulatory capital value as additional investment is made.
  • Price limits with a weighted average cost increase of zero in real terms.  Within this, typical bills for unmeasured non-domestic consumers will rise by 16% (£47) by the end of PC21.

Our draft determination documents, including a summary document, can be accessed through the links in the table below and further details on the consultation process can be found on our consultation web page.

Documents: 

PC21 Draft Determination – Main Report

Key point briefing

Annex A

Financing Investment

Annex B

Sources of Revenue

Annex C

Memorandum of Understanding

Annex D

Consequent Written Agreement

Annex E

Outputs

Annex F

Asset Serviceability

Annex G

Nominated Outputs List

Annex H

PC15 Out-turn Report

Annex I

Capital Investment

Annex J

Regional Price Adjustments PC21 (CEPA)

Annex K

Opex and Capex Frontier Shift

Annex L

PC21 Efficiency Modelling (CEPA)

Annex M

Change Control Protocol

Annex N

 

Financial Model

Annex O

Cost of Capital (First Economics)

Annex P

Pension Report by the Government Actuary Department (GAD)