Water Bill (HC Bill 82)

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(a) procedures in connection with making an agreement to permit
a main connection into a sewerage undertaker’s sewerage
system;

(b) procedures in connection with varying or terminating a main
5connection agreement;

(c) procedures to be followed by the Authority in determining
whether to make an order under section 110A(3) or 110B(1);

(d) the terms and conditions of a main connection agreement,
including terms as to the duration of such an agreement;

(e) 10principles for determining the terms and conditions that should
or should not be incorporated into a main connection
agreement;

(f) the steps to be taken by the Authority in determining whether a
person is complying with the code.

(3) 15Provision under subsection (2)(c) may in particular require the
Authority to consult the appropriate agency.

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

(5) 20The 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 to comply with a direction under
subsection (4), and this duty is enforceable by the Authority under
section 18.

(7) 25A code may make different provision for different persons or different
descriptions of person.

(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
30to main connection agreements made before the revised code comes
into force.

(10) In subsection (3), “the appropriate agency”, in relation to a
determination whether to make an order under section 110A(3) or
110B(1) which would result in, or which would vary or terminate, a
35main connection agreement, means—

(a) the Environment Agency, in a case where all parties to the main
connection agreement are or would be—

(i) a sewerage undertaker whose area is wholly in England,
or

(ii) 40a person who would, if the person’s application for an
appointment or variation is determined in accordance
with the application, be such a sewerage undertaker;

(b) the NRBW, in a case where all parties to the main connection
agreement are or would be—

(i) 45a sewerage undertaker whose area is wholly in Wales, or

(ii) a person who would, if the person’s application for an
appointment or variation is determined in accordance
with the application, be such a sewerage undertaker;

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(c) both the Environment Agency and the NRBW, in any other
case.

110D Codes under section 110C: procedure

(1) Before issuing a code under section 110C, the Authority must—

(a) 5prepare a draft of the code proposed to be issued, and

(b) consult such persons about the proposed code as it considers
appropriate.

(2) The Authority must specify the period (“the consultation period”)
within which a person may make representations about the proposed
10code.

(3) Before a code under section 110C prepared by the Authority is issued,
the Minister may direct the Authority—

(a) not to issue the code, or

(b) to issue the code with specified modifications.

(4) 15Subsection (3) is subject to subsections (6) and (7).

(5) In subsection (3) “the Minister” means—

(a) the Secretary of State, so far as a code prepared by the Authority
relates to main connection agreements under which—

(i) the main connection into a sewerage system, or

(ii) 20each such connection,

is or would be a main connection into the sewerage system of a
sewerage undertaker whose area is wholly or mainly in
England for the benefit of another such undertaker;

(b) the Welsh Ministers, so far as a code prepared by the Authority
25relates to main connection agreements under which—

(i) the main connection into a sewerage system, or

(ii) each such connection,

is or would be a main connection into the sewerage system of a
sewerage undertaker whose area is wholly or mainly in Wales
30for the benefit of another such undertaker;

(c) the Secretary of State and the Welsh Ministers acting jointly, so
far as a code prepared by the Authority relates to main
connection agreements under which one main connection into
a sewerage system is or would be—

(i) 35a main connection into the sewerage system of a
sewerage undertaker whose area is wholly or mainly in
England for the benefit of a sewerage undertaker whose
area is wholly or mainly in Wales, or

(ii) a main connection into the sewerage system of a
40sewerage undertaker whose area is wholly or mainly in
Wales for the benefit of a sewerage undertaker whose
area is wholly or mainly in England.

(6) If the power under subsection (3) is exercised to give a direction in
respect of such main connection agreements as are referred to in
45paragraph (a), (b) or (c) of subsection (5), it may not be exercised again
in respect of such main connection agreements as are referred to in that
paragraph.

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(7) If the power under subsection (3) to give a direction in respect of such
main connection agreements as are referred to in paragraph (a), (b) or
(c) of subsection (5) is not exercised on the first occasion on which it
may be so exercised, it may not be exercised in respect of such main
5connection agreements as are referred to in that paragraph on a later
occasion.

(8) A direction under subsection (3) must be given within the period of 28
days beginning with the day after the end of the consultation period,
and a code in relation to which a direction may be given may not be
10issued before that period of 28 days has expired.

110E Codes under section 110C: minor or urgent revisions

(1) This section applies if the Authority propose to issue a revised code
under section 110C and, in the view of the Authority, the revision or
each of the revisions proposed to be made is—

(a) 15a revision for which consultation is unnecessary, or

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

(2) Section 110D does not apply to the revised code.

(3) Once the Authority has issued the revised code, it must give notice as
20soon 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) 25Notice under subsection (3) is to be given to such persons as the
Authority 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
30beginning with the day after that on which the revised code is issued.

110F Rules about charges for permitting main connections

(1) The Authority may issue rules about charges that may be imposed by a
sewerage undertaker under a main connection agreement.

(2) The rules may in particular specify—

(a) 35what types of charge may be imposed;

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

(c) principles for determining what types of charge may or may not
40be imposed;

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

(3) If the Authority considers that a sewerage undertaker is not acting as
required by rules under this section, the Authority may give the
45undertaker a direction to do, or not to do, a particular thing specified in
the direction.

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(4) It is the duty of a sewerage undertaker to comply with a direction under
subsection (3), and this duty is enforceable by the Authority under
section 18.

(5) The rules may—

(a) 5make different provision for different sewerage undertakers or
different descriptions of sewerage undertaker;

(b) make different provision for different purposes;

(c) make provision subject to exceptions.

(6) The Authority may from time to time review rules issued under this
10section and issue revised rules.

(7) Revised rules may include provision for applying any of the revisions
to main connection agreements made before the revised rules come into
effect.

110G Rules under section 110F: provision about the reduction of charges

(1) 15Rules under section 110F may provide for the reduction of charges
payable under a main connection agreement where conditions
specified by the rules are satisfied.

(2) Rules made by virtue of subsection (1) may in particular—

(a) specify conditions by reference to any party to a main
20connection agreement;

(b) require that steps be taken for the purpose of reducing the cost
to a sewerage undertaker of permitting a main connection into
its sewerage system;

(c) specify conditions about reducing charges payable by a person
25who—

(i) is not party to the agreement, and

(ii) takes or proposes to take such steps as satisfy or would
satisfy a condition falling within paragraph (b).

(3) The rules may provide that, where a charge falls to be reduced in
30accordance with rules made by virtue of subsection (1), the sewerage
undertaker to which the charges are payable must give notice of that
reduction to the Authority.

(4) Rules made by virtue of subsection (3) may—

(a) make provision as to the content of the notice;

(b) 35specify the period within which an undertaker is to give notice
to the Authority.

(5) Provision under subsection (4)(a) may in particular require the notice
to specify—

(a) the provision of the rules that brings about the reduction in the
40charge;

(b) the amount of the charge, with and without the reduction;

(c) the period for which the reduction has effect.

110H Rules under section 110F: procedure

(1) Before issuing rules under section 110F, the Authority must—

(a) 45prepare a draft of any proposed rules, and

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(b) consult such persons about the proposed rules as it thinks
appropriate.

(2) The Authority must specify the period (“the consultation period”)
within which persons may make representations about the proposed
5rules.

(3) The Authority must have regard to guidance issued under section 110I
in making rules under section 110F.

(4) Before rules under section 110F prepared by the Authority are issued,
the Minister may direct the Authority—

(a) 10not to issue the rules, or

(b) to issue the rules with specified modifications.

(5) In subsection (4) “the Minister” means—

(a) the Secretary of State, so far as rules prepared by the Authority
relate to main connection agreements under which—

(i) 15the main connection into a sewerage system, or

(ii) each such connection,

is or would be a main connection into the sewerage system of a
sewerage undertaker whose area is wholly or mainly in
England for the benefit of another such undertaker;

(b) 20the Welsh Ministers, so far as rules prepared by the Authority
relate to main connection agreements under which—

(i) the main connection into a sewerage system, or

(ii) each such connection,

is or would be a main connection into the sewerage system of a
25sewerage undertaker whose area is wholly or mainly in Wales
for the benefit of another such undertaker;

(c) the Secretary of State and the Welsh Ministers acting jointly, so
far as rules prepared by the Authority relate to main connection
agreements under which one main connection into a sewerage
30system is or would be—

(i) a main connection into the sewerage system of a
sewerage undertaker whose area is wholly or mainly in
England for the benefit of a sewerage undertaker whose
area is wholly or mainly in Wales, or

(ii) 35a main connection into the sewerage system of a
sewerage undertaker whose area is wholly or mainly in
Wales for the benefit of a sewerage undertaker whose
area is wholly or mainly in England.

(6) A direction under subsection (4) must be given within the period of 28
40days beginning with the day after the end of the consultation period,
and rules may not be issued before that period of 28 days has expired.

110I Rules under section 110F: guidance

(1) The Minister may issue guidance as to the content of rules under
section 110F.

(2) 45Before issuing the guidance, the Minister must—

(a) prepare a draft of the proposed guidance;

(b) consult the relevant persons about the draft.

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(3) The relevant persons are—

(a) the Welsh Ministers (in a case where the Minister is the
Secretary of State);

(b) the Secretary of State (in a case where the Minister is the Welsh
5Ministers);

(c) such other persons as the Minister thinks appropriate.

(4) The Minister may from time to time revise the guidance and issue
revised guidance.

(5) Subsections (2) and (3) apply to revised guidance as they apply to the
10original guidance.

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

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

(a) the Secretary of State, in relation to main connection agreements
15under which—

(i) any main connection into a sewerage system, or

(ii) each such connection,

is or would be a main connection into the sewerage system of a
sewerage undertaker whose area is wholly or mainly in
20England for the benefit of another such undertaker;

(b) the Welsh Ministers, in relation to main connection agreements
under which—

(i) any main connection into a sewerage system, or

(ii) each such connection,

25is or would be a main connection into the sewerage system of a
sewerage undertaker whose area is wholly or mainly in Wales
for the benefit of another such undertaker;

(c) the Secretary of State and the Welsh Ministers acting jointly, in
relation to main connection agreements under which one main
30connection into a sewerage system is or would be—

(i) a main connection into the sewerage system of a
sewerage undertaker whose area is wholly or mainly in
England for the benefit of a sewerage undertaker whose
area is wholly or mainly in Wales, or

(ii) 35a main connection into the sewerage system of a
sewerage undertaker whose area is wholly or mainly in
Wales for the benefit of a sewerage undertaker whose
area is wholly or mainly in England.

(2) In sections 110B to 110I of the Water Industry Act 1991 (as substituted by
40subsection (1))—

(a) a reference to a main connection agreement includes a reference to an
old main connection agreement, and

(b) a reference to an established undertaker, in relation to a main
connection agreement, is to be construed accordingly.

(3) 45For the purposes of subsection (2)

(a) “old main connection agreement” means an agreement made before the
coming into force of subsection (1) that is an agreement with one or
more sewerage undertakers for that undertaker or each of them to

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permit a main connection into its sewerage system, and includes an
order under old section 110A which is deemed to be an agreement by
virtue of old section 110A(5);

(b) references to old section 110A are references to section 110A, as that
5section had effect before being substituted under subsection (1).

Agreements to adopt infrastructure

10 Agreements by water undertakers to adopt infrastructure

(1) The Water Industry Act 1991 is amended as follows.

(2) In section 51A (agreements to adopt a water main or service pipe at a future
10date)—

(a) in subsection (3) (application to make an agreement under section 51A),
for the words from “make an application” to the end there is substituted
“request a water undertaker to make an agreement under this section.”;

(b) subsections (4) to (8) are repealed;

(c) 15after subsection (9) there is inserted—

(9A) The reference in subsection (9) to an agreement made under this
section includes a reference to—

(a) an order under section 51B which is deemed to be an
agreement by virtue of section 51B(5), and

(b) 20an agreement which has been varied by order under
section 51C(1).

(3) For section 51B (appeals with respect to adoption) and section 51C (financial
conditions of compliance) there is substituted—

51B Adoption at a future date: orders by Authority

(1) 25This section applies where a person constructing or proposing to
construct a water main or service pipe makes a request to a water
undertaker under section 51A(3).

(2) The person or the water undertaker may apply to the Authority for an
order under subsection (4) if the person and the water undertaker have
30not made such agreement as was requested by the person.

(3) The Authority may, on the application of the person or the water
undertaker, make an order under subsection (4) if the Authority is
satisfied that—

(a) it is appropriate for work proposed to be done by a person other
35than the water undertaker to be so done, and

(b) the person and the water undertaker cannot reach agreement
within a reasonable time.

(4) The Authority may by order—

(a) require the water undertaker to give such undertakings as to the
40vesting of the water main or service pipe in the undertaker as
the Authority may specify, and

(b) impose such terms and conditions as regards taking the benefit
of the undertakings as the Authority may specify.

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(5) An order under subsection (4) has effect as an agreement under section
51A between the person and the water undertaker.

(6) The Authority may not, by order under subsection (4), require a water
undertaker to vest in itself a water main or service pipe as regards
5which there is a contravention of any of the requirements of section 74
that are prescribed for the purposes of this subsection.

(7) The Authority may not make an order under subsection (4) with
respect to a water main or service pipe that is situated within the area
of another water undertaker, until either—

(a) 10that other undertaker has consented in writing to the making of
the order, or

(b) the Minister, on an application made to the Minister, has
disapplied paragraph (a), either unconditionally or subject to
such conditions as the Minister thinks fit.

(8) 15“The Minister” means—

(a) the Secretary of State, in relation to a water undertaker whose
area is wholly or mainly in England;

(b) the Welsh Ministers, in relation to a water undertaker whose
area is wholly or mainly in Wales.

(9) 20Neither the CMA nor the Authority may exercise, in respect of an
agreement for the vesting of a water main or service pipe in a water
undertaker at a future date, the powers conferred by—

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

(b) 25section 35(2) of that Act (interim directions).

(10) Subsection (9)(b) does not apply to the exercise of powers in respect of
conduct—

(a) which is connected with an agreement for the vesting of a water
main or service pipe at a future date, and

(b) 30in 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.

(11) In exercising its functions under this section, the Authority must have
35regard to the desirability of—

(a) facilitating effective competition within the water supply
industry;

(b) the recovery by the water undertaker of the expenses of
complying with its obligations by virtue of this section and
40securing a reasonable return on its capital;

(c) the ability of the water undertaker to meet its existing
obligations, and likely future obligations, to supply water
without having to incur unreasonable expenditure in carrying
out works;

(d) 45not putting at risk the ability of the water undertaker to meet its
existing obligations, or likely future obligations, to supply
water.

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51C Variation and termination of section 51A agreements

(1) On the application of a party to a section 51A agreement to vary (or
terminate) the agreement, the Authority may—

(a) if it appears to the Authority that it is necessary or expedient
5that the section 51A agreement should be varied (or
terminated),

(b) if the Authority is satisfied, in the case of an application to vary
the agreement, that it is appropriate for work proposed to be
done by a person other than the water undertaker to be so done,
10and

(c) if the Authority is satisfied that variation (or termination)
cannot be achieved by agreement within a reasonable time,

by order vary (or terminate) the section 51A agreement.

(2) If an order under subsection (1) is made in relation to a section 51A
15agreement, the agreement—

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

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

(3) An order under subsection (1) may require any party to the agreement
to pay compensation to any other party.

(4) 20Neither the CMA nor the Authority may exercise, in respect of an
agreement to vary or terminate a section 51A agreement, the powers
conferred by—

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

(b) 25section 35(2) of that Act (interim directions).

(5) Subsection (4)(b) does not apply to the exercise of powers in respect of
conduct—

(a) which is connected with an agreement to vary or terminate a
section 51A agreement, and

(b) 30in 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.

(6) In exercising its functions under this section, the Authority must have
35regard to the expenses incurred by the water undertaker in complying
with its obligations under the section 51A agreement in question and to
the desirability of—

(a) facilitating effective competition within the water supply
industry;

(b) 40the recovery by the water undertaker of the expenses of
complying with its obligations by virtue of this section and
securing a reasonable return on its capital;

(c) the ability of the water undertaker to meet its existing
obligations, and likely future obligations, to supply water
45without having to incur unreasonable expenditure in carrying
out works;

(d) not putting at risk the ability of the water undertaker to meet its
existing obligations, or likely future obligations, to supply
water.

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(7) In this section and sections 51CA to 51CF “section 51A agreement”
means an agreement with a water undertaker for the vesting of a water
main or service pipe in a water undertaker at a future date and
includes—

(a) 5an order under section 51B which is deemed to be an agreement
by virtue of section 51B(5), and

(b) any agreement which has been varied by order under
subsection (1).

51CA Codes in respect of section 51A agreements

(1) 10The Authority may issue one or more codes in respect of section 51A
agreements.

(2) A code may make provision about—

(a) procedures in connection with making an agreement under
section 51A;

(b) 15procedures in connection with varying or terminating a section
51A agreement;

(c) procedures to be followed by the Authority in determining
whether to make an order under section 51B(4) or 51C(1);

(d) the circumstances in which it is, or is not, appropriate for work
20to be done by a person other than a water undertaker;

(e) the terms and conditions of a section 51A agreement;

(f) principles for determining the terms and conditions that should
or should not be incorporated into a section 51A agreement;

(g) the steps to be taken by the Authority in determining whether a
25person is complying with a code.

(3) Provision under subsection (2)(c) may in particular require the
Authority to consult—

(a) the Chief Inspector of Drinking Water;

(b) the Chief Inspector of Drinking Water for Wales if there is one.

(4) 30Provision under subsection (2)(d) may include in particular provision
about circumstances relating to—

(a) the nature of the work;

(b) the kind of premises supplied or to be supplied.

(5) Provision under subsection (2)(e) may include in particular provision
35about terms and conditions as regards—

(a) constructing associated infrastructure;

(b) vesting associated infrastructure in a water undertaker;

(c) constructing water mains so as to meet additional supply
requirements;

(d) 40connecting new water mains or service pipes to the existing
supply system of a water undertaker;

(e) complying with requirements of the kind referred to in section
47(2);

(f) the duration of a section 51A agreement.

(6) 45If the Authority considers that a water undertaker is not acting as
required by a code, the Authority may give the undertaker a direction
to do, or not to do, a particular thing specified in the direction.