Northumbrian Water’S (NWL) Submission Following Our Hearing on 3 December 2020 (NWL Pfs Hearing)
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NWL PR19 CMA REDETERMINATION –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`$7'5$7-5)A05$,0)*6?(P$ a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b$)'$ 0+(-50$)A*)$.-()'/05($*50$*,0^-*)0?>$G5')0.)0,P$ Q00$Q0.)6'+$N$7'5$7-5)A05$,0)*6?(P$ 17 DECEMBER 2020 !" NWL PR19 CMA REDETERMINATION – POST PFS HEARING SUBMISSION O6(K$*+,$50)-5+$*+,$76+*+.0*=6?6)>$ 16/6+@$-G$*+,$ ;0$(0)$'-)$'-5$(-GG'5)$7'5$*6/6+@W-G$6+$(0))6+@$)A0$*??'B0,$50)-5+$6+WG56+.6G?0$ (0))6+@$)A0$ *+,$)A0$.'+(-/05$,0)56/0+)$)A*)$.*+$*56(0$75'/$-+,056+H0()/0+)$6+$B*)05<$ *??'B0,$50)-5+$ =-)$+')0$)A*)$6+$G5*.)6.0$)A0$&21$A*($+')$*6/0,$-GP$C7B*)$/6(50G50(0+)($)A0$ &21D($3R$;1&&$*($cA6@AD$'5$c*='H0$/*5K0)D<$7*6?($)'$50.'@+6(0$)A0$ .A*5*.)056()6.($'7$)A0$(0.)'5$*+,$'H05()*)0($)A0$()50+@)A$'7$*?)05+*)6H0$ 6+.0+)6H0($)'$,56H0$6+H0()/0+)P$2-.A$'7$C7B*)D($0H6,0+.0$B0$76+,$)'$=0$ *+0.,')*?$*+,$G*5)6*?P$ Q00$Q0.)6'+$!""4#$7'5$7-5)A05$,0)*6?(P$ 21OQ$*+,$?6()0,$ ;0$-G,*)0$'-5$2*>$%9%9$*+*?>(6($'7$21O($)'$507?0.)$)A0$G056',$2*>$d$ .'/G*+>$6+)056/($ Y'H0/=05$%9%9$*+,$(A'B$)A*)$)A6($6/G?60($*$21O$5*+@0$7'5$Qe_$*+,$[[$'7$ 9P:N$d$"P9N$BA6.A$6($(?6@A)?>$?'B05$)A*+$)A0$2*>$%9%9$5*+@0$!'7$9P:N$d$"P9b#$ (A'B6+@$+'$G50/6*$)'$)A0$C7B*)$RV":$;1&&P$;0$(A'B$)A*)$?6()0,$.'/G*+>$ 6+)056/($B050$B'5(0$)A*+$)A0$(*/0$>0*5$6+$123$4<$BA6.A$6($+')$.'+(6()0+)$ B6)A$C7B*)D($(-@@0()6'+($)A*)$)A0$?6()0,$.'/G*+>$50(-?)($(-GG'5)$)A0$RV":$ G*.K*@0<$0(G0.6*??>$'+.0$)A0$123$4$'-))-5+$G'(6)6'+$6($507?0.)0,P$ Q00$Q0.)6'+$`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cR'??'B$ -G$ '=(05H*)6'+($ '+$ )A0$ .'()$ '7$ 0^-6)>D$ =>$ 35'70(('5$U50@'5>P$ &'()$'7$V0=)$ C7B*)D($ 50(G'+(0($ )'$ )A0$ &21D($ ^-0()6'+($ 6+$ 50?*)6'+$ )'$ )A0$ .'()$ '7$ ,0=)$ (-@@0()$*$.'+7-(0,$G'?6.>$75*/0B'5KP$X770.)6H0?>$C7B*)D($G'?6.>$50/'H0($)A0$ G'(6)6H0$6+.0+)6H0$G5'G05)60($'7$)A0$+')6'+*?$6+,0F$=>$*GG?>6+@$*$c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`PN$*+,$1GG0+,6F$M$7'5$7-5)A05$,0)*6?(<$*($B0??$*($)A0$(0G*5*)0$ G*G05$Y;a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c50(0)D$ 6($ .?0*5?>$ 'H05()*)0,$*@*6+()$G*()$G057'5/*+.0P$$ Q00$Q0.)6'+$`P`$7'5$7-5)A05$,0)*6?(P$ U0*56+@$ ;0$506)05*)0$)A*)$)A0$UCQ2$6($+')$50^-650,$*+,$)A*)$)'$)A0$0F)0+)$C7B*)$A*($ C-)G057'5/*+.0$ ?0@6)6/*)0$.'+.05+($*='-)$6+,6H6,-*?$.'/G*+60(<$)A0(0$.'-?,$*+,$(A'-?,$=0$ QA*56+@$ *,,50((0,$-(6+@$)A0$')A05$50@-?*)'5>$)''?($*H*6?*=?0P$ 20.A*+6(/$ Q00$Q0.)6'+$`PM$7'5$7-5)A05$,0)*6?(P$ !UCQ2#$ &-()'/05$ ;0$ +')0$ )A0$ .56)6.*?$ .'//0+)($ /*,0$ =>$ C7B*)$ B6)A$ 50(G0.)$ )'$ G')0+)6*?$ 0+@*@0/0+)$*+,$ c.*G)-50D$'7$)A0$&&U($*+,$506)05*)0$)A0$6+,0G0+,0+.0$'7$)A0(0$@5'-G($*+,$ )A0$&&U($ )A065$6/G'5)*+)$5'?0$6+$)A0$G56.0$.'+)5'?$G5'.0((P$ Q00$Q0.)6'+$M$7'5$7-5)A05$,0)*6?($ % 17 DECEMBER 2020 #" NWL PR19 CMA REDETERMINATION – POST PFS HEARING SUBMISSION 2! COSTS AND OUTCOMES !N#$ M$%0D>5-#.0?%#.%'*(%"0-(#.7%-.?%>(0J#'*$%$*,+#$$#'.$F%60%-(0%-$P#.7%)"0%ILM%)'%:'.$#?0(% )"0% (-.70% '4% '>)#'.$% #)% "-$% -J-#5-,50% 6"#:"F% #4% #)% -7(00$% )"0G% (0>(0$0.)% ->>('>(#-)0% #.)0(J0.)#'.$Q-+0.?+0.)$%)'%B9ONF%6'*5?%:'.)(#,*)0%)'%:5'$#.7%)"0%RS8+%7->%,0)600.%)"0% AB$%-55'6-.:0%-.?%'*(%-.)#:#>-)0?%044#:#0.)%:'$)$%?*(#.7%MLAT=%%% !`#$ U-:"%'4%)"0$0%'>)#'.$%-(0%J-5#?%#.%)"0#(%'6.%(#7")F%,*)%60%(0:'7.#$0%)"-)%)"0%ILM%.00?$%)'% +-P0%-%V*?70+0.)%#.%)"0%('*.?%-,'*)%)"0%->>('>(#-)0%50J05%'4%)')0D%-55'6-.:0=%%W4%-55%'4%)"0% -?V*$)+0.)$%60%"-J0%>(0$0.)0?%60(0%)'%,0%+-?0%60%-::0>)%)"-)%#)%6'*5?%(0$*5)%#.%-%"#7"0(% )')0D%)"-.%'*(%XAON=%!'%(0#)0(-)0F%"'60J0(F%60%-(0%.')%$00P#.7%+'(0%)')0D%)"-.%$0)%'*)%#.%'*(% XAON%Y%#.$)0-?%)"0%>'#.)$%'.%:'$)$%(-#$0?%)'%?-)0F%-.?%05-,'(-)0?%'.%#.%)"0%4'55'6#.7%$0:)#'.$F% $#+>5G%(0>(0$0.)%-%(-.70%'4%-(7*+0.)$%4'(%)"0%ILM%)'%:'.$#?0(%#.%)"0%('*.?=%% 2.1$ 2019/20 DATA 2.1.1& Drivers of 2019/20 data versus previous years !M#$ /0%"-J0%$0)%'*)%-%(-.70%'4%-(7*+0.)$%4'(%)"0%#.:5*$#'.%'4%)"0%;<ONK;<%:'$)%?-)-%#.%)"0%ILM1$% 4#.-5%,-$0%:'$)%+'?055#.7%#.%'*(%(0$>'.$0%)'%)"0%AB$%-.?%?'%.')%(0>0-)%)"'$0%-(7*+0.)$%"0(0=% !4#$ W)%$00+$%*.:'.)('J0($#-5%)"-)%)"0%;<ONK;<%6-$)06-)0(%:'$)$%-(0%.0#)"0(%-)G>#:-5%.'(%?#$)'()#J0%