Order No. 122 on price ceiling regulation in the water sector.

This Order applies to water companies and wastewater utilities with the purpose of determining the regulatory opening balance and price ceiling regulation. When a water company price ceiling is a framework for the maximum total accrued primary revenue, an income ceiling charge shall be applied to a total measure of cubic meter for a one year period. Provisions of this Order ensure that the fixing of price ceilings apply to extraction, processing, transportation and delivery of water for a fee, including the sale of water to other water companies, as well as transport, treatment and effluent disposal fee, including sludge incineration for other wastewater treatment plants. Price ceilings shall be calculated based on the operating costs determined as the water supplier’s primary revenue minus 1:1 costs, on the operating costs to achieve environmental and service goals, on costs for investment, net financing and material costs which have expired. Calculation shall also be based on the correction of over- or under-coverage together with on the opening balance and additions to historical investments. Water suppliers must annually by 15 April submit the necessary information to the Danish Competition and Consumer Authority (DCCA) for setting price ceilings for the following year. The DCCA shall establish and publish the basis of the results-oriented benchmarking. Water suppliers may in exceptional cases be exempted from price ceiling in case of unforeseen events, including sudden rupture, collapse, fire, terrorism or accident.
The Order consists of 11 Chapters and 1 Appendix: Scope (1); Price ceiling (2); Investment plans and accounts (3); Benefits provided to other water companies (4); Regulatory opening balance sheet and accounts (5); Benchmarking (6); Exemptions (7); Indexation (8); Appeals (9); Penalties (10); Transitional provisions and entry into force (11).