PC15 MTR Report

In our final determination on NI Water’s plans for the PC15 price control period (covering the period 1st April 2015 to 31st March 2021) which was published in December 2014, we proposed that PC15 should include a mid-term review so that the company’s plans could be reviewed and if necessary amended as a consequence of any changes that might have occurred in the first half of the price control period.

We completed this review in 2017 and published our PC15 Mid-Term Review Report summarising the outcome on 14th February 2018.  The main conclusions are that:

  • To date NI Water has broadly delivered against the majority of the final determination targets outlined in the PC15 price control.
  • NI Water should have sufficient funding to deliver all the outputs defined in the final determination under the planning scenarios considered, although if there were further significant reductions this would likely impact on outputs and benefits identified in PC15.
  • NI Water has marginally outperformed efficiency targets whilst also delivering against its service level outputs, demonstrating that costs savings are being delivered by efficiency as opposed to a reduction in service.
  • A review of K factors is not necessary at this time and we believe that PC21 is the most appropriate time to consider the need for any adjustments.
  • The company continues to maintain serviceability and so we believe that base maintenance funding can be maintained at final determination levels in real terms for the remainder of the period, in line with the current agreed policy.
  • We acknowledge that funding uncertainty and annual budget allocations/adjustments have the potential to impact on the company’s ability to plan effectively and deliver the maximum efficiencies and benefits for consumers.
  • We expect NI Water to continue to review its capital programme challenge to ensure that opportunities for scope and cost reductions are realised.
  • We are concerned that all work required and funded in PC15 to support the preparation of a more robust business plan for PC21 may not be completed on time. The company needs to ensure an appropriate focus in this area to avoid any lost opportunities for maximising the benefits to customers.