A formal investigation was announced today into how Northern Ireland Water (NIW) managed the release of information in late February about its costs and tariffs. The investigation centres on information about the amount of money that the water company raises from non-domestic customers which could have an impact on household bills.
The objectives of the investigation are to determine the chronology of events, identify issues and make recommendations. Specifically, the investigation will be carried out as a two stage process, with an initial stage focusing on the collection of information, which will inform second stage considerations around whether or not NIW breached its licence.
On 31 January 2008 Northern Ireland Water Limited (NIW) provided the Regulator with proposed tariffs contained within a tariff model, an Interim Principle Statement (IPS) and scheme of charges. On 22 February 2008 three things happened: it became publicly known that the allocation assumptions in the Strategic Business Plan were inaccurate, which meant more revenue was required with respect to services to domestic consumers than had been expected and conversely proportionately less revenue being required for non-domestic customers; the Utility Regulator was informed of this fact by NIW; and the Utility Regulator received a report on the tariff model, and IPS from its Reporter – Technical Auditor (Black & Veatch).
It subsequently became clear that NIW had been aware of the problem with the SBP allocation assumptions prior to their submission of the tariff model and Interim Principal Statement on 31 January and had held extensive discussions with the Department for Regional Development (which is providing subsidy to cover the domestic revenue requirement for 2008-09).
However, the Utility Regulator’s staff and management were only made aware of the significance of the re-allocations by NIW on 22 February.
The investigation is to focus on events during the October 2007 to February 2008 period and in particular NIW’s communications on the matter. A report on the investigation will be produced by the Utility Regulator by the end of May 2008.
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