Regional price adjustments for PR15 for NI Water

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Client Northern Ireland Authority for Utility Regulation (NIAUR)
Dates 2014
Sector(s)Water
Service(s)Policy & Economics, Regulation & Competition
CEPA provided economic advice to the Northern Ireland Utility Regulator on the application of a Regional Price Adjustment (RPA) during its price control review PR15 of Northern Ireland Water (NIW). CEPA’s work involved:• developing a structural cost model, including:
  • a high-level breakdown of cost areas for a typical water industry capital project;
  • estimating regional price differentials using price indices and weighting these differentials to produce an RPA; and
  • developing a methodology for applying the RPA’s.
As part of this project, CEPA conducted sensitivity analysis testing the robustness of the model and made recommendations to the Utility Regulator on the application of the RPA.
 
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