The Utility Regulator has today published our Final Determination on the Mid-Term Review of the current price control for NI Water, PC21. This follows on from our Draft Determination that was published for consultation in May 2024.
The Utility Regulator 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.
NI Water is a government-owned company which is responsible for providing water and sewerage services to consumers in Northern Ireland. Since it is the sole provider of these services, we undertake price controls which ensure NI Water has enough revenue to operate an efficient business that delivers what Northern Ireland consumers need.
Our PC21 Price Control Final Determination was published in May 2021 and covers the six‑year period from 2021 to 2027. It reflected the priorities set in the Department for Infrastructure’s Social and Environmental Guidance. It also ensured value for money by allowing NI Water the revenue required to support a deliverable investment plan which was efficient and affordable from a tariff perspective.
The Mid-Term Review was included in PC21 as the opportunity for NI Water to address any uncertainty that existed when the PC21 Final Determination was published in 2021.
This Final Determination sets out our Mid-Term Review findings following our assessment of NI Water's submission and consideration of the comments received in response to our Draft Determination consultation.
Our Mid-Term Review determines:
Some limited adjustments to output targets.
An average tariff increase of 4.5% in each of the last two years of the PC21 period to mitigate against an unprecedented increase in NI Water’s power costs.
A capital allowance of c£2.4bn in today’s prices (nominal) for the full price control period to maintain existing services and deliver the upgrades required to meet its quality, environmental and service level obligations.
It remains consistent with the principles of the Department for Infrastructure’s Social and Environmental Guidance for the price control period and its conclusions remain largely in line with those in our Mid-Term Review Draft Determination. However, the Mid-Term Review 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 and outside the MTR process, and we will take account of the outcome of this work as part of the PC21 Outturn Report process.
We received five responses to our Draft Determination consultation which are available here.