AS Tallinna Vesi submitted its tariff application for 2011-2015 to the Competition Authority

AS Tallinna Vesi has submitted its tariff application for 2011-2015 to the
Competition Authority in accordance with the Anti-Monopoly Bill that came into
effect on November 1st,  the Company is hoping that the new regulator will
approve the tariffs within the next 30 days. 
AS Tallinna Vesi's CEO Ian Plenderleith said that the Company agrees with the
Competition Authority's statement that regulation matters should be discussed
openly in a democratic society. „Thus AS Tallinna Vesi is publishing its tariff
application in full to act in line with good corporate governance practices and
with international regulation principles in order to ensure that the public
will understand how tariffs are calculated and the process becomes more
transparent,“ said Plenderleith. 
The Services Agreement between AS Tallinna Vesi and the City of Tallinn
prescribes that water tariffs in Tallinn would only change by CPI between 2010
and 2020. The Company believes that the current contract protects customers
from future cost increases above the level of general inflation and provides
returns to investors, therefore Company has decided against applying for the
full cost increases that would be allowed under the new regulatory model
proposed by the Competition Authority. „AS Tallinna Vesi has proposed for a
nominal tariff change over the five year period from January 2011 until
December 2015, as a multi-year application accords with international norms for
privatised water utility regulation and recognises that the water industry has
long planning horizons,“ added Plenderleith. AS Tallinna Vesi has sought expert
verification of its 10 -year review of performance and expects the regulator to
conduct a thorough review of the Company's performance in the previous
regulatory period from 2001 until 2010 prior to finalising the fortcoming price
determination. 
According to the Company's tariff application, water tariffs would increase by
3,5% in 2011; 2,5% in 2012; 2,6% in 2013, 2,7% in 2014 and 2,7% in 2015,
helping the Company ensure that the service and quality standards in effect
under the current contract with the City of Tallinn remain in place and will be
achieved in the future as well. „However, as Estonia is joining the Euro zone
from January 1st 2011, the Company will round its tariffs down to the nearest
cent, therefore the proposed increase for 2011 will in fact be below 3 per cent
and below the rate of inflation for the period,“ added Plenderleith. 
The Company expects that its application will be dealt with solely on its
economic and quality of service merits and that the application is the first
step towards an open and professional discussion on best practice economic
regulation. „We would expect the authorities to consider the real cost of
capital and the actual value of invested capital, when determining the
justified profitability of AS Tallinna Vesi,“ added Plenderleith. 
The tariff application can be found here:
http://www.tallinnavesi.ee/?op=body&id=657 
The cover letter to the Competition Authority is attached to this announcement. 

Priit Koff
Head of Public Relations
AS Tallinna Vesi
+372 62 62 209
Priit.koff@tvesi.ee