Tribunal alters price course

2 November 2006
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02 November 2006 | Paul Snell

Ofwat may be forced to change its water pricing structure following a judgement from the Competition Appeal Tribunal. Energy experts said such a move could encourage more suppliers to enter the market and create better competition.

The tribunal ruled that prices quoted by Welsh Water to supplier Albion Water were excessive. It overturned a judgment made by water regulator Ofwat in May 2004 that found Welsh Water did not breach the Competition Act when quoting prices to Albion for treatment and transportation.

Albion complained to Ofwat in 2001 that the price estimate meant it would not be able to supply water to its customer at a lower cost than it was already paying, negating competition. The tribunal will decide later this month what action is to be taken. Energy consultant Chris Lewis told SM if it orders Ofwat to change the way water prices are calculated, he expects more suppliers to enter the market.

Ofwat and Welsh Water could appeal against the judgment. Jerry Bryan, managing director of Albion Water, told SM he would be disappointed if they did, particularly because it would mean a further delay. "The judgement was so clear," he added.

SMnov2006

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