The Utility Regulator today announced its approval of the Scheme of Charges which NI Water (NIW) will charge non-domestic customers from 1 April 2008. According to NIW, the changes to charging arrangements will affect approximately 60,000 existing non-domestic customers and an additional 50,000 new customers in Northern Ireland. The introduction of the charges for non-domestic customers reflects the Northern Ireland Executive’s decision to proceed with charging for water and sewerage services from April 2008.
For 2008/09 bills will only issue to non-domestic customers, with the phasing in of new charges at 50% of the full charge in 2008/09 and 100% in 2009/10. This results in 22% of NIW’s revenue being collected from non-domestic customers; 73% being funded by subsidy from the Executive with the remaining 5% attributable to Roads Drainage.
In approving NIW’s Scheme of Charges for 2008/09 the Utility Regulator has:
• Approved a total revenue for the company of £339.4 M (£16.8M less than the revenue cap within their Strategic Business Plan 2007 to 2010).
• Agreed a sum of £17.2M for roads drainage to be removed from bills and re-charged to the Department for Regional Development’s Roads Service. 1
• Applied enhanced operational efficiency targets on the company, reducing revenue requirements by a further £3.2M.
Commenting on today’s announcement, Jo Aston (Water Director at the Utility Regulator) said:
‘The Utility Regulator’s role is to protect essential water and sewerage services for consumers and safeguard the future of those services.
‘Each year the Utility Regulator will challenge NIW to make sure their customer charges are in line with revenue limits. Only when we are satisfied that they are, will we approve charges.’
‘We are pleased to be able to approve Northern Ireland Water’s Scheme of Charges for 2008/09 which endorses the bills to issue to non-domestic customers.’
Notes for Editors
(1) The Utility Regulator is the non-Ministerial Government Department responsible for regulating the electricity and gas industries and water and sewerage services in Northern Ireland.
(2) The Northern Ireland Authority for Utility Regulation (the Utility Regulator) has the role under Article 201 (7) of The Water and Sewerage Services (Northern Ireland) Order 2006 of approving Northern Ireland Waters Limited’s charging scheme (the Scheme of Charges) for each financial year. Any Scheme of Charges submitted by Northern Ireland Water Limited (NIW), must be in accordance with the requirements of the Order and also with its Instrument of Appointment (the Licence).
(3) The Assembly’s decision in May 2007 to carry out an independent review of water and sewerage service’s (IWRP) has benefited all customers in reducing bills. For 2008/09 it has resulted in £17.18 million being met by DRD Roads Service., the phasing in of new charges for non-domestic customers, acknowledged the contribution being made by domestic customers through their rates bill and directed that no domestic bills be issued until 2009/10.
(4) Northern Ireland’s Water allowed revenue for 2008/9 has been agreed as £339.36m (comprising £168,371,695 attributable to water and £170,988,305 attributable to sewerage). This represents a decrease of £16.8m when compared to the original revenue requirement of £356.16m. An amount of £17.18m has been attributed to roads drainage and will be re-charged to DRD Roads Service. The revenue amount attributable to sewerage, to be recovered from customers (or subsidy as the case may be) is therefore reduced by this amount. Any increase in non – domestic bills includes RPI of 2.5% as per ministerial guidance.
(5) There are no domestic bills for 2008/09 as determined by the Northern Ireland Executive.
(6) The Utility Regulator received NIW’s Scheme of Charges on the 31st January, however the mis-apportionment of costs between customer groups, resulted in the need to review funding by subsidy the additional costs falling to domestic customers. The resultant delay meant that the Utility Regulator received the NIW’s revised Scheme of Charges for approval on the 18th March. Within the time available, the Utility Regulator has carried out appropriate due diligence in respect of determining compliance of the Scheme of Charges with the Licence to enable non-domestic bills to be issued on time.
(7) Following formal approval of the 2008/9 Scheme of Charges, the Utility Regulator expects to publish in May 2008 a report on the 2008/9 Scheme of Charges. This report will address the issue of mis-apportionment of costs between different customer groups. The Utility Regulator is to carry out an investigation into the mis-apportionment issue.
Media Contact - Greg Irwin (0779) 4335860.