Three water companies appeals their Price Control determinations to the CMA

Perhaps unsurprisingly given how tough Ofwat's decisions for the 2020-25 price controls were expected to be several large companies (Bristol Water, Anglian Water and Yorkshire Water) have opted to have the determinations referred to the Competition and Markets Authority (CMA). Of the three companies Anglian Water had the largest gap between its proposed investment of £6.5bn and Ofwat’s final determination of £5.7bn. The totex gap of £747.8m means bills would come down by 10% compared to Anglian Water’s proposed one per cent bill reduction.

The CMA will now form an appeal panel for review the decisions, with an expected period of 6 months (with the potential for extensions) before the CMA delivers its decisions. The appeal will be closely watched by other companies and sectors. Ofgem is also expected to set out tough price controls as part of the RIIO-2 process by the end of the year. Additionally, the Utility Regulator will be delivering two price control decisions this year. Interest in and willingness to appeal a regulatory decision appears to be reaching a new high. The CMA is currently determining the NATS En-route Limited (NERL) Price Determination. This price control appeal has seen an unprecedented number of third party representations be submitted to the CMA. The nineteen representations received come from a cross section of different sectors and interested companies. Increasingly companies must face the reality of trying to meet the onerous regulatory obligations placed upon them under ever decreasing allowances from their regulators.

For more information on this topic please contact Stephen Abram, Associate or any member of A&L Goodbody's Belfast EU, Competition & Procurement team.

Date published: 14 February 2020