A new appointment or variation (NAV) provides the opportunity for a company to provide water, sewerage or water and sewerage services for a specific area in place of the former provider for that area (the incumbent).
When we grant NAVs, we seek to ensure all customers are made no worse off. This includes customers on the site as well as customers of the incumbent.
Historically, we have provided an estimate of the potential impact of granting a NAV on the incumbent’s existing customer base. But because the number and complexity of NAV applications we receive is increasing, we consider that it is necessary to develop our approach to assessing this potential impact to include:
- taking into account any costs avoided by the incumbent
- calculating the impact of granting a NAV on customers across a longer time frame
We invited representatives from stakeholders affected by, and with a substantial interest in, NAVs to a seminar on 11 April 2013 to consult on our proposed, more sophisticated approach. These stakeholders included:
- the existing water and sewerage companies
- the existing water only companies
- new appointees
- Defra
- the Consumer Council for Water
Our approach to calculating the impacts on bills of incumbents’ customers when we grant new appointments or variations (NAVs) – note of seminar, 11 April 2013