Capstone Infrastructure Corporation
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Capstone Infrastructure Corporation

February 06, 2015 07:30 ET

Bristol Water Seeks Review of Ofwat Business Plan Determination

TORONTO, ONTARIO--(Marketwired - Feb. 6, 2015) - Capstone Infrastructure Corporation (TSX:CSE)(TSX:CSE.DB.A)(TSX:CSE.PR.A)(TSX:CPW.DB) (the "Corporation") today announced that the Board of Directors of Bristol Water has resolved to formally reject the final price determination for 2015 to 2020 set by the Water Services Regulation Authority (Ofwat), the water industry regulator in England and Wales. The business plan will proceed to review by the Competition and Markets Authority (CMA), the UK agency responsible for considering regulatory references and appeals. The review process is expected to conclude in six months, in accordance with the statutory timetable.

Capstone is the largest owner in Bristol Water, a regulated water utility in the UK that provides 240 million litres of water daily to more than 1.2 million people.

Ofwat is the economic regulator with oversight of Bristol Water and every other water and sewage treatment utility in the England and Wales. Every five years, Ofwat approves the pricing model and business plan (known as the Asset Management Plan, or AMP) that applies to each of these utilities, in a process called the price review (PR).

The PR14 process was extensive, involving more than a year of submissions, revisions, direct negotiations, expert analysis and customer input. Capstone management assisted Bristol Water's team during this time to prepare a plan designed to balance system improvements with price reductions, while serving the stated interests of customers.

On December 12, 2014 Ofwat delivered a final determination on the business plan for AMP6 that differed significantly from Bristol Water's plan. There were several major points of difference between Bristol Water's proposed business plan and Ofwat's final determination, which we believe pose serious challenges to maintaining service levels and investing in the improvements customers supported.

Any adjustments arising from the CMA's decision would come into effect on April 1, 2016.

About Capstone Infrastructure Corporation

Capstone's mission is to provide investors with an attractive total return from responsibly managed long-term investments in core infrastructure in Canada and internationally. The company's strategy is to develop, acquire and manage a portfolio of high quality utilities, power and transportation businesses, and public-private partnerships that operate in a regulated or contractually-defined environment and generate stable cash flow. Capstone currently has investments in utilities businesses in Europe and owns, operates and develops thermal and renewable power generation facilities in Canada with a total installed capacity of net 461 megawatts. Please visit www.capstoneinfrastructure.com for more information.

Contact Information

  • Capstone Infrastructure Corporation
    Aaron Boles
    Senior Vice President, Communications and Investor Relations
    (416) 649-1325
    aboles@capstoneinfra.com