(5) The Minister may from time to time review guidance issued under
this section and issue revised guidance.

(6) Subsections (3) and (4) apply to revised guidance as they apply to the
original guidance.

(7) 5The Minister must arrange for the publication of guidance issued
under this section.

(8) In this section “the Minister” means—

(a) the Secretary of State, in relation to section 66D agreements
affecting only the supply systems of water undertakers
10whose areas are wholly or mainly in England;

(b) the Welsh Ministers, in relation to section 66D agreements
affecting only the supply systems of water undertakers
whose areas are wholly or mainly in Wales;

(c) the Secretary of State and the Welsh Ministers acting jointly,
15in relation to section 66D agreements not falling within
paragraph (a) or (b).”

6 Section 66F (section 66D: supplementary) is repealed.

7 (1) Section 66G (designation of strategic supply) is amended as follows.

(2) In subsection (1), for “an agreement under section 66D above” there is
20substituted “a section 66D agreement”.

(3) In subsection (4)(d), for “the agreement under section 66D above” there is
substituted “the section 66D agreement”.

(4) In subsection (10)—

(a) for “section 66A” there is substituted “section 66AA”;

(b) 25for “customers of the licensed water supplier in question” there is
substituted “relevant customers of a water supply licensee”.

(5) After subsection (10) there is inserted—

“(11) A person is a relevant customer of a water supply licensee if the
introduction of water in question is made by reference to the supply
30of water to that person’s premises in accordance with—

(a) a retail authorisation (whether that retail authorisation is an
authorisation of the licensee requesting the introduction of
water or another water supply licensee’s authorisation), or

(b) a restricted retail authorisation of the licensee requesting the
35introduction of water.”

8 (1) Section 66H (designation of collective strategic supply) is amended as
follows.

(2) In subsection (1)(b), for “agreements under section 66D above” there is
substituted “section 66D agreements”.

(3) 40In subsection (4)(d), for “the agreements under section 66D above” there is
substituted “the section 66D agreements”.

(4) In subsection (10)—

(a) for “section 66A” there is substituted “section 66AA”;

(b) for “customers of the licensed water supplier in question” there is
substituted “relevant customers of a water supply licensee”.

(5) After subsection (10) there is inserted—

“(11) A person is a relevant customer of a water supply licensee if an
5introduction of water is made by reference to the supply of water to
that person’s premises in accordance with a retail authorisation
(whether that retail authorisation is an authorisation of the licensee
requesting the introduction of water or another water supply
licensee’s authorisation) or a restricted retail authorisation of the
10licensee requesting the introduction of water.”

9 (1) Section 66I (prohibition on unauthorised use of supply system) is amended
as follows.

(2) In subsection (1), for “of a customer” there is substituted “of—

“(a) a customer,

(a) 15the person so using that system, or

(a) a person associated with that person”.

(3) In subsection (2)(b)—

(a) for “licensed water supplier” there is substituted “water supply
licensee”;

(b) 20for “its licence” there is substituted “the licensee’s licence”.

(4) After subsection (8), there is inserted—

“(8A) For the purposes of this section, a person (A) is associated with
another person (B) if they would be associated with each other for the
purposes of Schedule 2A if A were a water supply licensee.”

(5) 25In subsection (9), for “section 17B(5) above” there is substituted “section
17B”.

Section 4

SCHEDULE 3 Sewerage licences: authorisations

Retail authorisation

1 30A retail authorisation given by a sewerage licence is an authorisation to the
sewerage licensee to use the sewerage system of a sewerage undertaker for
the purpose of enabling the licensee to provide sewerage services in respect
of the premises of—

(a) the licensee,

(b) 35persons associated with the licensee, or

(c) the licensee’s customers.

2 None of the premises served by a sewerage licensee under a retail
authorisation may be household premises (as defined in section 17C).

3 The requirement in paragraph 2 is enforceable by the Authority under
section 18.

4 The Authority may from time to time, with the approval of the Secretary of
State, issue guidance as to the factors which are, or are not, to be taken into
5account in determining the extent of any premises for the purposes of
paragraph 2.

Wholesale authorisation

5 A wholesale authorisation given by a sewerage licence is an authorisation to
the sewerage licensee to remove matter from the sewerage system of a
10sewerage undertaker where—

(a) the sewerage system is being used to enable a sewerage licensee
(whether the licensee or another sewerage licensee) to provide
sewerage services in respect of premises in accordance with a retail
authorisation, and

(b) 15the removing of matter from the sewerage system is done in
connection with sewerage services so provided.

Disposal authorisation

6 A disposal authorisation given by a sewerage licence is an authorisation to
the sewerage licensee to remove matter from the sewerage system of a
20sewerage undertaker.

7 If a sewerage licensee with a disposal authorisation has, or a person
associated with the licensee has, a retail authorisation—

(a) the licensee or the person associated with it, or both of them, must
obtain a wholesale authorisation, and

(b) 25neither the licensee nor the person associated with it (if that person
has a disposal authorisation) may remove matter from a sewerage
system in accordance with the disposal authorisation (or either
disposal authorisation, if both have such an authorisation) while
matter may be removed in accordance with the wholesale
30authorisation (or either wholesale authorisation, if both have such an
authorisation).

Interpretation

8 For the purposes of this Schedule, a person (A) is associated with a sewerage
licensee (L) if—

(a) 35where A and L are bodies corporate, one of them is a subsidiary of
the other or both are subsidiaries of the same body corporate;

(b) where A or L is an individual or an unincorporated association and
the other is a body corporate, that individual or unincorporated
association controls the other or a body corporate of which the other
40is a subsidiary;

(c) A is a partnership of which L is a member.

9 In paragraph 8 “subsidiary” has the meaning given by section 1159 of the
Companies Act 2006; and sections 450(1) to (4) and 451(1) to (3) of the
Corporation Taxes Act 2010 (control of a company) apply for the purposes
45of paragraph 11 as they apply for the purposes of Part 10 of that Act.”

Section 4

SCHEDULE 4 Sewerage undertakers’ duties as regards sewerage licensees

After Chapter 2 of Part 4 of the Water Industry Act 1991 there is inserted—

“Chapter 2A

Duties relating to sewerage services: sewerage licensees

5Duties of sewerage undertakers as regards enabling the provision of sewerage
services

117A Use of undertaker’s sewerage system

(1) This section applies where a sewerage licensee with a retail
authorisation (“L”) requests a sewerage undertaker to permit the use
10of the undertaker’s sewerage system for the purpose of enabling L to
provide sewerage services to premises that—

(a) L is to serve in accordance with L’s retail authorisation, and

(b) are in the area of the sewerage undertaker.

(2) Where this section applies, the undertaker must in accordance with
15a section 117E agreement take such steps—

(a) for the purpose of connecting the drains or sewers of the
premises in question to the undertaker’s sewerage system, or

(b) in respect of that system,

as may be provided for in that agreement in order to enable the
20requested use of that system.

(3) A sewerage undertaker is not required by this section to permit the
use of its sewerage system, or to take any steps to enable its use, if the
sewerage licensee making a request has not secured by means of—

(a) a request under section 117B made by the licensee, or

(b) 25a request under section 117C made by the licensee or another
sewerage licensee,

that there is to be provision for dealing with or removing matter from
the sewerage system in quantities determined by reference to the
extent of sewerage services provided in respect of the premises in
30question.

(4) Where—

(a) a request has been made by a sewerage licensee for the
purposes of subsection (1), and

(b) the steps which the undertaker is required to take by virtue
35of that request include steps for the purpose of obtaining any
necessary authority for, or agreement to, any exercise by it of
any of its powers or the carrying out by it of any works,

the failure of the undertaker to acquire the necessary authority or
agreement does not affect the liability of the licensee to reimburse the
40undertaker in respect of some or all of the expenses incurred by it in
taking those steps, if the section 117E agreement provides for such
liability as regards those steps.

(5) In this section and sections 117B to 117C—

(a) references to the sewerage system of a sewerage undertaker
are to be construed in accordance with section 17BA(7);

(b) references to the retail authorisation of a sewerage licensee
are to be construed in accordance with Schedule 2B.

117B 5Matter dealt with by sewerage undertaker

(1) This section applies where a sewerage licensee with a retail
authorisation (“L”) requests a sewerage undertaker to deal
effectually with certain quantities of matter in its sewerage system in
circumstances where—

(a) 10sewerage services are to be provided in accordance with L’s
retail authorisation in respect of particular premises in the
area of the undertaker, and

(b) the quantities to be dealt with are to be determined by
reference to the extent of sewerage services provided in
15respect of those premises.

(2) Where this section applies, the sewerage undertaker must in
accordance with a section 117E agreement—

(a) take such steps in respect of the undertaker’s sewerage
system as may be provided for in that agreement in order to
20enable the use of that system for the purpose in subsection
(1), and

(b) having taken those steps, deal with matter as requested.

(3) Where—

(a) a request has been made by a sewerage licensee for the
25purposes of subsection (1), and

(b) the steps which the undertaker is required to take by virtue
of that request include steps for the purpose of obtaining any
necessary authority for, or agreement to, any exercise by it of
any of its powers or the carrying out by it of any works,

30the failure of the undertaker to acquire the necessary authority or
agreement does not affect the liability of the licensee to reimburse the
undertaker in respect of some or all of the expenses incurred by it in
taking those steps, if the section 117E agreement provides for such
liability as regards those steps.

117C 35Removal of matter from sewerage system by a sewerage licensee

(1) This section applies where a sewerage licensee with a wholesale
authorisation (“L”) requests a sewerage undertaker to permit L to
remove certain quantities of matter from the undertaker’s sewerage
system in circumstances where—

(a) 40sewerage services are to be provided in accordance with a
retail authorisation (whether L’s or another’s) in respect of
particular premises in the area of the undertaker, and

(b) the quantities to be removed are to be determined by
reference to the extent of sewerage services provided in
45respect of those premises.

(2) Where this section applies, the sewerage undertaker must in
accordance with a section 117E agreement—

(a) take such steps, including steps in respect of the undertaker’s
sewerage system, as may be provided for in that agreement

in order to enable L to remove matter from the undertaker’s
sewerage system as requested, and

(b) having taken those steps, to permit that requested removal of
matter from that sewerage system.

(3) 5Where—

(a) a request has been made by a sewerage licensee for the
purposes of subsection (1), and

(b) the steps which the undertaker is required to take by virtue
of that request include steps for the purpose of obtaining any
10necessary authority for, or agreement to, any exercise by it of
any of its powers or the carrying out by it of any works,

the failure of the undertaker to acquire the necessary authority or
agreement does not affect the liability of the licensee to reimburse the
undertaker in respect of some or all of the expenses incurred by it in
15taking those steps, if the section 117E agreement provides for such
liability as regards those steps.

(4) A pipe connecting a sewerage undertaker’s sewerage system to a
sewage disposal works that is laid because of subsection (2)(a) is to
be regarded as a disposal main for the purposes of this Act, subject
20to any provision to the contrary.

(5) In this section, a reference to a wholesale authorisation is to be
construed in accordance with Schedule 2B.

117D Connections for the purposes of a disposal authorisation

(1) This section applies where a sewerage licensee with a disposal
25authorisation (“L”) requests a sewerage undertaker to permit L to
remove matter from the undertaker’s sewerage system.

(2) Where this section applies, the sewerage undertaker must in
accordance with a section 117E agreement—

(a) take such steps, including steps in respect of the undertaker’s
30sewerage system, as may be provided for in that agreement
in order to enable L to remove matter from the undertaker’s
sewerage system as requested, and

(b) having taken those steps, to permit that requested removal of
matter from that sewerage system.

(3) 35Where—

(a) a request has been made by a sewerage licensee for the
purposes of subsection (1), and

(b) the steps which the undertaker is required to take by virtue
of that request include steps for the purpose of obtaining any
40necessary authority for, or agreement to, any exercise by it of
any of its powers or the carrying out by it of any works,

the failure of the undertaker to acquire the necessary authority or
agreement does not affect the liability of the licensee to reimburse the
undertaker in respect of some or all of the expenses incurred by it in
45taking those steps, if the section 117E agreement provides for such
liability as regards those steps.

(4) A pipe connecting a sewerage undertaker’s sewerage system to a
sewage disposal works that is laid because of subsection (2)(a) is to

be regarded as a disposal main for the purposes of this Act, subject
to any provision to the contrary.

(5) In this section, a reference to a disposal authorisation is to be
construed in accordance with Schedule 2B.

117E 5Agreements as to duties under sections 117A to 117D

(1) On the application of—

(a) a sewerage licensee that has made a request under sections
117A to 117D, or

(b) a sewerage undertaker to which such a request has been
10made,

the Authority may by order require a sewerage undertaker to
perform the duty in question under sections 117A to 117D, for such
period and on such terms and conditions as may be specified in the
order.

(2) 15The Authority may make an order under subsection (1) only if—

(a) it appears to the Authority that the sewerage undertaker is
required to perform the duty in question, and

(b) it is satisfied that the parties cannot reach agreement within a
reasonable time.

(3) 20An order under subsection (1) has effect as an agreement between—

(a) the sewerage licensee, and

(b) the sewerage undertaker required to perform the duty in
question.

(4) On the application of a party to a section 117E agreement, the
25Authority may, if it is satisfied that the parties cannot reach
agreement on the variation or termination of the agreement, by order
vary or terminate the agreement.

(5) If an order under subsection (4) is made in relation to a section 117E
agreement, the agreement—

(a) 30has effect subject to the provision made by the order, or

(b) ceases to have effect, as the case may be.

(6) An order under subsection (4) may require one party to the
agreement to pay compensation to the other.

(7) Neither the CMA nor the Authority may exercise, in respect of an
35agreement for the performance of a duty under sections 117A to
117D by a sewerage undertaker, the powers conferred by—

(a) section 32 of the Competition Act 1998 (directions in relation
to agreements);

(b) section 35(2) of that Act (interim directions).

(8) 40Subsection (7)(b) does not apply to the exercise of powers in respect
of conduct—

(a) which is connected with an agreement for the performance of
a duty under sections 117A to 117D by a sewerage
undertaker, and

(b) 45in respect of which section 35(1) of the Competition Act 1998
applies because of an investigation under section 25 of that

Act relating to a suspected infringement of the Chapter 2
prohibition imposed by section 18(1) of that Act.

(9) In this Chapter a reference to a section 117E agreement is a reference
to—

(a) 5an agreement for the performance of a duty under sections
117A to 117D by a sewerage undertaker, or

(b) an order deemed to be such an agreement under subsection
(3), or

(c) an agreement varied by order under subsection (4).

117F 10Codes in respect of section 117E agreements

(1) The Authority may issue one or more codes in respect of section 117E
agreements.

(2) A code may make provision about—

(a) procedures in connection with making a section 117E
15agreement;

(b) procedures in connection with varying or terminating a
section 117E agreement;

(c) the terms and conditions of a section 117E agreement,
including terms as to the duration of such an agreement;

(d) 20principles for determining the terms and conditions that
should or should not be incorporated into a section 117E
agreement.

(3) A code may make provision about the steps to be taken by the
Authority in determining for the purposes of section 117E(2)
25whether a sewerage undertaker is, in the particular case, required to
perform a duty under sections 117A to 117D.

(4) If the Authority considers that a sewerage undertaker or a sewerage
licensee is not acting as required by a code, the Authority may give
the undertaker or the licensee a direction to do, or not to do, a thing
30specified in the direction.

(5) The Authority may not give a direction under subsection (4)
requiring a person to enter into, vary or terminate an agreement.

(6) It is the duty of a sewerage undertaker or a sewerage licensee to
comply with a direction under subsection (4), and this duty is
35enforceable by the Authority under section 18.

(7) A code may make—

(a) different provision for different persons or descriptions of
person;

(b) different provision for different duties under sections 117A to
40117D.

(8) The Authority may from time to time review a code issued under this
section and issue a revised code.

(9) A revised code may include provision for applying any of its
revisions to section 117E agreements made before the revised code
45comes into effect.

117G Codes under section 117F: procedure

(1) Before issuing a code under section 117F, the Authority must—

(a) prepare a draft of the proposed code under section 117F, and

(b) consult persons in accordance with subsections (2) and (3).

(2) 5The relevant persons are—

(a) the Secretary of State;

(b) the appropriate agency;

(c) the Council;

(d) any sewerage undertakers likely to be affected by the
10proposed code;

(e) any sewerage licensees likely to be affected by the proposed
code;

(f) such other persons as the Authority thinks appropriate.

(3) The Authority must specify the period (“the consultation period”)
15within which a person may make representations about the
proposed code.

(4) Before a code under section 117F prepared by the Authority is issued
for the first time, the Secretary of State may direct the Authority—

(a) not to issue the code, or

(b) 20to issue the code with specified modifications.

(5) A direction under subsection (4) must be given within the period of
28 days beginning with the day after the end of the consultation
period, and the code prepared by the Authority may not be issued
before that period of 28 days has expired.

(6) 25In this section “the appropriate agency” means—

(a) the Environment Agency, in relation to section 117E
agreements made with sewerage undertakers whose areas
are wholly in England;

(b) both the Environment Agency and the NRBW, in relation to
30section 117E agreements made with sewerage undertakers
whose areas are partly in England and partly in Wales.

(7) This section is subject to section 117H.

117H Codes under section 117F: minor or urgent revisions

(1) This section applies if the Authority proposes to issue a revised code
35under section 117F and, in the view of the Authority, the revision or
each of the revisions proposed to be made is—

(a) a revision for which consultation is unnecessary, or

(b) a revision that it is necessary or desirable to make without
delay.

(2) 40Section 117G does not apply to the proposed revised code.

(3) Once the Authority has issued the revised code, it must give notice
as soon as reasonably practicable of—

(a) the issuing of the revised code, and

(b) as regards each revision contained in it, whether in the view
of the Authority the revision falls within paragraph (a) or (b)
of subsection (1).

(4) Notice under subsection (3) is to be given to such persons as the
5Authority considers appropriate.

(5) Unless the Authority gives notice that a revision in a revised code is
in the view of the Authority a revision falling within subsection
(1)(a), the revision ceases to have effect at the end of the period of six
months beginning with the day after that on which the revised code
10is issued.

117I Rules about charges

(1) The Authority must issue rules about charges that may be imposed
by sewerage undertakers under a section 117E agreement.

(2) The rules may in particular make provision about—

(a) 15the types of charges that may be imposed;

(b) the amount or the maximum amount, or methods for
determining the amount or maximum amount, of any type of
charge;

(c) principles for determining what types of charges may or may
20not be imposed;

(d) principles for determining the amount of any charge that
may be imposed.

(3) The rules must include provision for and in connection with
requiring a sewerage undertaker to impose on a sewerage licensee
25only such charges as would enable the licensee, where the services it
provides to a person under its retail authorisation are services to
which a section 142(2)(b) agreement would apply if the undertaker
had continued to provide the services, to charge for those services at
the same rate or rates as would have applied if the section 142(2)(b)
30agreement had applied.

(4) In subsection (3) “section 142(2)(b) agreement” means an agreement
to which section 142(2)(b) applies.

(5) If the Authority considers that a sewerage undertaker is not acting as
required by rules under this section, the Authority may—

(a) 35give the undertaker a direction to do, or not to do, a thing
specified in the direction, or

(b) in a case where a section 117E agreement to which the
undertaker is party requires modification in order to conform
to the rules, give a direction to the undertaker and the
40sewerage licensee in question to modify the agreement.

(6) It is the duty of a sewerage undertaker or a sewerage licensee to
comply with a direction under subsection (5), and this duty is
enforceable by the Authority under section 18.

(7) The rules may—

(a) 45make different provision for different persons or descriptions
of person;

(b) make different provision for different purposes;