APPLYING THE COSTS PRINCIPLE - OFWAT'S FIRST WHOLESALE ACCESS PRICE DETERMINATION

摘要

Interpretation of the 'costs principle', set out in section 66A of the Water Industry Act 1991 (WIA 91), has proved to be both controversial and strategically important. The focus of the long running Shotton Paper Mill case, Ofwat has described it as: '... one of the most significant barriers to the development of effective retail competition'. Ofwat has recently applied the principle, which governs the charges that a new entrant water supplier must pay to an incumbent water company for 'access' to its network, for the first time in its determination of the wholesale access price offered by Anglian Water Services Ltd (Anglian) to Aquavitae UK Ltd (Aquavitae). This article summarises the statutory and factual background to that determination before outlining the analysis that Ofwat applied. It concludes with a re-cap of the Competition Appeal Tribunal's (CAT) summary judgment in the Shotton case and asks the question -where can aspirations for a competitive retail market go from here?