Annex 3
CC REGULATORY INQUIRIES MARCH 1998-MARCH
2003
Water (3)
Mid-Kent Water (Feb-Aug 2000)under Water
Industry Act 1991 sections 12 (price determination) and 14 (disputed
licence).
Determination of Koverall
effect over five years of reduction of 15.3 per cent in prices,
as opposed to Director General of Water Services (DGWS)'s proposed
reduction of 19.5 per cent.
Divergence from views of DGWS and
Mid Kent on issues involved determining K.
Recommendation for licence modification.
Sutton and East Surrey Water (Feb-Aug 2000)under
Water Industry Act 1991 sections 12 and 14.
Determination of Koverall
effect over five years of reduction of 13.5 per cent in prices,
as opposed to Director General's proposed reduction of21.3
Divergence from views of DGWS and
Sutton and East Surrey on issues involved determining K.
Recommendation for licence modification.
Vivendi Water UK Plc and First Aqua (May-Sept
2002)merger referred under Water Industry Act 1991.
Merger rejecteddivestment
of Vivendi Water's 31.4 per cent stake in South Staffs Group to
secure the latter's independence as a comparator; and the DGWS
to be vigilant in monitoring the performance of Southern Water
Services Limited. Dissenting view that sale of Three Valleys should
also be required.
Minister decided not to accept majority
view on remediesasked DGWS to discuss with Vivendi the
creation of a new water company (Hampshire Water), and the expansion
of Folkestone and Dover water services to include part of Southern
Water's existing region.
Airports (2)
BAA (Feb-Oct 2002)quinquennial review
under Airports Act 1986.
Manchester (Feb-Oct 2002).
In bothfound against the public
interest.
Detailed recommendations.
CAA diverged from CC recommendations
on some points, but
BAA: broad agreement on cost of capital,
clawback of capital overspend in current year five review arising
from delays in planning permission for Terminal 5 and providing
rebates for users if certain quality services not achieved.
Manchester: CAA decided price cap
of RPI5 per cent not 8.9 per cent recommended by CC, some
other modifications of CC recommendations.
Electricity (1)
AES and British Energy (May-Dec 2000)licence
modification under Electricity Act 1989.
Director General of Electricity Services
had proposed a licence modification to include a condition prohibiting
conduct which amounts to an abuse of a position of substantial
market power. This was accepted by six generator groups, but not
AES and British Energy, so the matter was referred to the Competition
Commission.
The CC found the unmodified licences
were not against the public interestit recommended no modifications
to licence applying to determination of wholesale electricity
prices, did not identify ways in which AES and British Energy
were likely to be able to abuse a position of market power.
Ofgem accepted the findings but was
deeply disappointed as it would have to withdraw the market abuse
licence condition from all generators.
Gas (1)
Centrica/Dynegy Storage (merger)Feb-June
03 (in progress).
Telecoms (3)
Cellnet and Vodafone (Mar-Dec 98)under
Telecommunications Act 1984.
BT (Cellnet and Vodafone (Mar-Dec 98).
Against the public interestBT's
retention on fixed-to-mobile calls to Cellnet and Vodafone networks
higher than could be justified. Recommended modifications in BT's
licence.
DGT announced intention to implement
fully the recommendations of the MMC.
Vodafone, O2, Orange, and T-Mobile (Jan 2002-Feb
2003)under Telecommunications Act 1984.
Against public interest: concluded
that termination charges in 2002-03 were 30 to 40 per cent in
excess of the CC's estimation of the fair charge; and may be up
to double the level of the fair charge by 2005-06.
Oftel accepted CC's findings, in
particular the CC's suggestion of a one-off cut by 15 July 2003.
It said arrangements for the control of termination charges after
July 2003 would be considered in the market review to be undertaken
by Oftel under the requirements of the new European Directives.
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