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NI Water will increase customer bills by an average of 4.6% to cover its rising energy costs.
The Utility Regulator – which regulates Northern Ireland’s utilities – has allowed NI Water to increase its revenue stream by £54 million for the final three years of its ongoing price control.
The increase is revealed within the regulator’s mid-term review of PC21, which runs from 2021 to 2027.
The Utility Regulator has also proposed a revised capital allowance for the entire price control of £2.4 billion, a £300 million increase on the allowance set at the start of the price control.
The regulator said that “inflation in PC21 has been much higher than assumed at the time of the PC21 Final Determination” and was largely responsible for the increased expenditure limit.
In its Mid-Term Review submission, NI Water also said it had experienced “significant construction cost pressures above inflation as a result of unprecedented economic instability since the PC21 Final Determination”.
It indicated that this had been “driven by external factors such as Brexit, Covid19 and energy/resource inflation”.
NI Water director of finance, regulation and commercial, Ronan Larkin, said: “We are aware this is a challenging time for businesses and the economy.
“But like many of our business customers, NI Water continues to face significant financial pressures from continued high energy prices, high inflationary conditions, and other cost increases.
“While any increase is of course unwelcome, we have worked hard to ensure most of our customers will see their bills rise by less than inflation.
“Specific bill changes operate according to a formula agreed with the Northern Ireland Utility Regulator.”
Domestic users pay for their water via the Department for Infrastructure, which makes payments to NI Water on customers’ behalf.
Ahead of this period, the water company stressed that economic growth was at risk if water infrastructure could not be invested in. At PC15 it was constrained to ensure affordability for consumers, however at PC21 a different approach was agreed upon.
The Department for Infrastructure, which is the utility’s sole shareholder gave the company greater freedom to invest to expand drainage and networks to meet the growing needs of the country in the 21st century.
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