Consultation On The Licence For Northern Ireland Water Limited

4 December 2006
CONSULTATION ON THE LICENCE FOR NORTHERN IRELAND WATER LIMITED
The Department for Regional Development today published the draft Instrument of Appointment (otherwise known as a Licence) of Northern Ireland Water Limited (NIWL) for public consultation.
The draft Order, that is presently going through Parliament provides for the Department to issue a Licence, to govern the appointed company's operations. The Licence will come into force on 1 April 2007 and will be enforced by the new Economic Regulator.
The overall purpose of the Licence is to detail arrangements for setting price limits for NIWL, how these are to be incorporated into customers' bills, for ensuring that the supply and quality of service are maintained and that the interest of customers are protected at all times.
The document marks another key step towards delivering the highly ambitious programme of improvements to Northern Ireland's water and sewerage services within the framework set out by the draft Water and Sewerage Services (NI) Order 2006.
The Licence gives effect to the full range of Government policy through the imposition of a series of conditions on Northern Ireland Water Limited for the delivery of water and sewerage services within the framework set by the draft Order.
Announcing the consultation on the Licence, Minister David Cairns said:
"The draft Licence published today for consultation is a key document governing the operations of the new company - Northern Ireland Water Limited. In developing this licence we have taken careful account of the views of the future economic regulator and the future consumer representative. The result is a licence that takes account of best regulatory practice, builds on licensing in England and Wales and is tailored to our own circumstances in Northern Ireland.
"This draft Licence will protect customers' interests through robust regulatory scrutiny whilst setting an appropriate framework to enable the company to operate effectively and sustainably.
"As well as building on best practice elsewhere, the draft licence puts in place arrangements for the package of measures previously announced by Government to ensure that domestic charges are in line with average bills in England and Wales in the first 3 years and arrangements for the new charges to be phased in over the same period. The draft Licence also provides for the first Price Review by the Economic Regulator in 2009."
The draft Licence is accompanied by an initial Statement of Regulatory Principles and Intent from the Chief Executive of the Northern Ireland Authority for Energy Regulation, in advance of its taking on the role of Economic Regulator for Northern Ireland's water industry. The statement does not bind the future regulator but sets out, at a high level, the approach, intent and principles that he expects the Authority to adopt for the independent, economic regulation of NIWL. The statement provides useful context for the regulatory environment in which the final Licence will be managed.
NOTES TO EDITORS:
1. The consultation period will run for 10 weeks with responses to be received by midday on Friday 9 February 2007.
2. On 10 August 2004 Government announced that the role of the Northern Ireland Authority for Energy Regulation (NIAER) would be expanded to include the regulation of Northern Ireland's water and sewerage industry in 2006. NIAER currently regulates the electricity and gas industries in Northern Ireland and with effect from 1 April 2007 will become known as Northern Ireland Authority for Utility Regulation (NIAUR).
3. On 10 August 2004, the Government also announced that the role of the General Consumer Council would be expanded to act as consumer representative for water and sewerage.
4. The Department for Regional Development will set water and sewerage charges for the first 3 years.
5. The draft Licence contains 16 separate conditions that are outlined in the Executive Summary of the Explanatory Memorandum contained within the supporting document in the consultation pack.
6. The draft Water and Sewerage Services (Northern Ireland) Order 2006 was laid at Westminster on 9 October 2006.
7. The draft Order was be debated in the House of Commons on 28 November 2006 and will be debated in the House of Lords on 11 December 2006 and subject to Parliamentary approval, it will come into operation on 1 April 2007. It is intended that domestic charges for water and sewerage services will be introduced from April 2007.

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