This is about a price for the bulk supply of non-potable water between Iggesund Paperboard (Workington) Limited and United Utilities.
Iggesund Paperboard (Workington) Limited wrote to Ofwat requesting that we determine both:
- the price per cubic meter for non-potable water supplied to the company
- the use of the retail price index to adjust the price each year.
We carried out a detailed investigation of the specific facts of this case.
We considered it desirable that United Utilities recover the costs of providing the supply, but have also taken into account the ability of Iggesund Paperboard (Workington) Limited to self-supply with duplicate assets. Any such duplicate self-supply would leave United Utilities’ existing infrastructure largely redundant and would impact adversely on their wider customer base.
So, we have concluded that United Utilities should reduce the price that it charges IP(W)L from 14.9p/m3 to 7.7p/m3 (at 2006-07 prices) and use RPI (the retail price index) to adjust prices for inflation.
We consulted on our draft determination using our powers under section 56 of the Water Industry Act, 1991.
And we have issued our final determination.
21 October 2010
2 December 2015
Section 56 of the Water Industry Act 1991.
Relevant Ofwat guidance
- Ofwat framework for resolving pricing disputes involving bulk supplies
- Bulk supply pricing – a statement of our policy principles (February 2011)