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Mr P Darby
Chairman
Tendring Hundred Water Services Ltd
Mill Hill
Manningtree
Essex
CO11 2AZ

19 December 2000

INTERIM DETERMINATION

On 28 September you made an application for an interim determination of your company's price limits under Part IV of Condition B of the licence. You have made this application in respect of the Notified Item for meter optants, citing greater numbers of customers taking up the free meter option than was allowed for in the Final Determination. Your estimates of the effect of these changes on your costs and revenues were set down in your application and are summarised inAnnex A. The Reporter, Colin Page of Montgomery Watson submitted his report on your application on 6 October.

On 15 November I issued our provisional response to your application. You subsequently sent me your representations and we discussed these matters on 5 December.

We have completed our assessment of your application and subsequent representations in the light of all the information available to us. Our approach and our findings, judgements and conclusions are summarised in Annex B attached to this letter. We have provided you with some explanatory notes expanding on Annex B. Our final assessment of the impact of the changes of your costs and revenues are set out in the summary table (Annex A).

Following your representation we have reviewed our position and made the following changes to the draft determination:

• We have changed our assumption about the number of customers opting for a meter in 2000-01, following receipt of your latest information.
• We have changed our assumption about the mix of internal and external meters to be consistent with the Competition Commission.
• We have changed our assumptions about optant pre-switching consumption patterns

I attach at Annex C a revised Notified Item. The symmetrical Notified Item model used by the Competition Commission, together with the new projections of optional meters will be incorporated into the determination.

We are placing this determination in the Ofwat library at the same time as announcing our decision to the London Stock Exchange.

This letter and enclosures has been copied to Alan Davis (DETR), Michael Rouse (DWI), Robert Runcie (Environment Agency), Roger Corbett (Chairman of Eastern CSC), Ivan Henderson MP, Bernard Jenkin MP, Richard Howitt MEP, Bashir Khanbhai MEP, Jeffrey Titford MEP.

PHILIP FLETCHER

Click here for the draft interim determination issued on 15 November 2000