annual report 2011 - Konkurentsiamet

services, the coordination of the calculation methods of the accession fee and the supervision of
the prices of water supply services and the amounts of accession fees.
In 2011, the Competition Authority approved the prices of water supply services of nine water
supply undertakings, AS Tartu Veevärk and AS Haapsalu Veevärk being the largest. The main
reason for the prices of water supply services having changed were the extensive investments in
the provision of PWSSS in connection with the allocation of the Cohesion Fund support by the
Environmental Investment Centre (hereinafter the EIC). Numerous undertakings lacked an
efficient water and/or wastewater treatment system. The support of the Cohesion Fund allocated
by the EIC allows adequately treated water to be consumed and the wastewater exported into the
environment to be purified to ensure a better and cleaner environment while the renovation of
pipelines allows water resources to be used sparingly. Regardless of the support allocated by the
EIC, the investments made in water resources management are still one of the major reasons of
the increase in water supply service prices. Namely, investments made in water resources
management require cost-sharing from the undertaking. Even if the cost-sharing amounts to
30%, it results in a remarkable increase in the price of the water supply service. Taking into use
water/wastewater treatment plants implies an increase in electricity consumption and chemical
agents’ consumption. In case the undertaking has not exactly taken water and wastewater
treatment seriously in the previous periods and investments in pipelines were non-existent, the
consumer price may increase significantly. Water supply undertakings can make the increase in
prices smoother for consumers by not applying for the approval of the whole reasonable cost
benefit. The Competition Authority can also regard the smaller than allowed cost benefit in the
price of water supply services as feasible in case the financial obligations and costs of the water
supply undertaking are covered.
The PWSS development plan is to be approved by the local government council. In the process
of the preparation of the plans, it is essential to thoroughly consider whether offering PWSS
services to all potential customers in any situation is reasonable. The provision of leak-tight
collecting tanks or biological wastewater treatment plants, i.e. local solutions, should be
considered for wastewater collection areas, where the construction of the PWSS system will result
in unreasonably large costs. It is often the unconsidered development of PWSS (especially in
areas located in wastewater collection areas with population equivalent below 2,000) that is one
of the reasons of a considerable increase in the price of water supply services, and 100% of the
infrastructure created with the support of the Cohesion Fund will have to be replaced by using
the finances obtained from the price of water supply services. This means that the price of water
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