Water Bill (HC Bill 82)

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

(c) make provision about the principles for determining what types
5of charges may or may not be imposed;

(d) make provision about the principles for determining the
amount of any change that may be imposed;

(e) provide for charges to be payable over a period.

(3) The charges that may be imposed by a water undertaker under section
1042(2)(a) for the provision of a new water main may include charges
for—

(a) providing such other infrastructure, including other water
mains, as it is necessary to provide in consequence of the
provision of the new water main;

(b) 15doing works to increase the capacity of an existing water main,
or procuring the doing of such works, where the use of that
increased capacity is a consequence of the provision of the new
water main.

(4) The charges that may be imposed by a sewerage undertaker under
20section 99(2)(a) for the provision of a new public sewer may include
charges for—

(a) providing such other infrastructure, including other public
sewers, as it is necessary to provide in consequence of the
provision of the new public sewer;

(b) 25doing works to increase the capacity of an existing public sewer,
where the use of that increased capacity is a consequence of the
provision of the new public sewer.

(5) The rules may make provision as to—

(a) the amount of security that may be required by a relevant
30undertaker under section 42(1)(b), 47(2)(a), 99(1)(b), 101B(3A),
107(3)(b)(ii) or 185(5);

(b) the type of security that may be required;

(c) the payment of interest on a sum deposited with a relevant
undertaker by way of security.

(6) 35If the Authority considers that a relevant undertaker is not acting as
required by rules under this section, the Authority may give the
undertaker a direction to do, or not to do, a thing specified in the
direction.

(7) It is the duty of a relevant undertaker to comply with a direction under
40subsection (6), and this duty is enforceable by the Authority under
section 18.

(8) The rules may make—

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

(b) 45different provision for different powers to impose charges or
different descriptions of such powers.

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

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144ZB Rules under section 144ZA: procedure

(1) The Authority must have regard to guidance issued under section
144ZC in making rules under section 144ZA.

(2) Before issuing rules under section 144ZA, the Authority must—

(a) 5prepare a draft of the proposed rules, and

(b) consult the relevant persons about the draft.

(3) The relevant persons are—

(a) the Secretary of State;

(b) the Welsh Ministers;

(c) 10the Council;

(d) any relevant undertakers likely to be affected by the rules;

(e) any water supply or sewerage licensees likely to be affected by
the rules;

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

(4) 15The Authority must specify the period (“the consultation period”)
within which a person may make representations about the proposed
rules.

(5) Before rules under section 144ZA prepared by the Authority are issued,
the Minister may direct the Authority—

(a) 20not to issue the rules, or

(b) to issue them with specified modifications.

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

(a) the Secretary of State, so far as the rules in question affect
relevant undertakers whose areas are wholly or mainly in
25England;

(b) the Welsh Ministers, so far as the rules in question affect
relevant undertakers whose areas are wholly or mainly in
Wales.

(7) A direction under subsection (5) must be given within the period of 28
30days beginning with the day after the end of the consultation period,
and rules prepared by the Authority may not be issued before that
period of 28 days has expired.

144ZC Rules under section 144ZA: guidance

(1) The Minister must issue guidance as to the content of rules under
35section 144ZA.

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

(a) prepare a draft of the proposed guidance;

(b) consult the relevant persons about the draft.

(3) The relevant persons are—

(a) 40the Secretary of State;

(b) the Welsh Ministers;

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

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

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

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

(7) 5In this section “the Minister” means—

(a) the Secretary of State, in relation to relevant undertakers whose
areas are wholly or mainly in England;

(b) the Welsh Ministers, in relation to relevant undertakers whose
areas are wholly or mainly in Wales.

18 10Charges for providing a water main etc

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

(2) In section 42 (financial conditions for compliance with the duty in section 41 to
provide a water main)—

(a) in subsection (1)(b) (condition as to providing security), for the words
15from “such security” to “reasonably required” there is substituted
“such security as charging rules allow and the undertaker may have
required”;

(b) in subsection (2) (undertaking to pay), for paragraph (a) there is
substituted—

(a) 20bind the person or persons mentioned in that subsection
to pay to the undertaker such charges as the undertaker
may impose in accordance with charging rules, and;

(c) subsections (4) and (5) (interest on sums deposited by way of security)
are repealed;

(d) 25in subsection (6) (reference of disputes to Water Services Regulation
Authority), in paragraph (b), after “the amount” there is inserted “or
amounts by way of charges”.

(3) In section 45 (duty to make domestic connections to a water main)—

(a) in subsection (2) (the nature of the duty), the words “, at the expense of
30the person serving the notice,” are repealed;

(b) for subsection (6) there is substituted—

(6) Where a water undertaker carries out any works which it is its
duty under this section to carry out, the person serving the
notice is liable to pay to the undertaker such charges as the
35undertaker may impose in accordance with charging rules.;

(c) in subsection (6A) (reference of disputes to Authority), for “as to
whether the expenses were incurred reasonably” there is substituted
“as to the payments required to be made”.

(4) In section 46 (duty to carry out ancillary works for the purpose of making a
40domestic connection under section 45)—

(a) in subsection (1) (the nature of the duty), the words “, at the expense of
the person serving the notice,” are repealed;

(b) in subsection (7), in paragraph (b), for “under this section at another
person’s expense” there is substituted “as its duty under this section”;

(c) 45in subsection (7), in the words after paragraph (b), for “under that
section at another person’s expense” there is substituted “as its duty
under that section”;

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(d) in subsection (9) (consequences of exercising power under section 46(8)
to lay a water main rather than a service pipe), paragraph (b)
(maximum expenses recoverable) and the “but” preceding it are
repealed.

(5) 5In section 47 (conditions of connection with water main)—

(a) in subsection (2)(a) (requirement to give security for amounts to be
paid), for the words from “such security” to “reasonably require” there
is substituted “such security as charging rules allow and the undertaker
requires”;

(b) 10in subsection (3B) (reference of disputes to Authority), in the opening
words, “whether” is repealed;

(c) in subsection (3B), for paragraph (a) there is substituted—

(a) the security required to be provided by a condition
imposed under subsection (2)(a),;

(d) 15in subsection (3B)(b), at the beginning there is inserted “whether”;

(e) in subsection (3B)(c), after “particular case,” there is inserted “whether”.

19 Charges for providing a public sewer etc

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

(2) In section 99 (financial conditions for compliance with the duty in section 98 to
20provide a public sewer or lateral drain)—

(a) in subsection (1)(b) (condition as to providing security), for the words
from “such security” to “reasonably required” there is substituted
“such security as charging rules allow and the undertaker may have
required”;

(b) 25in subsection (2) (undertaking to pay in respect of public sewer), for
paragraph (a) there is substituted—

(a) bind the person or persons mentioned in that subsection
to pay to the undertaker such charges as the undertaker
may impose in accordance with charging rules, and;

(c) 30in subsection (2A) (undertaking to pay in respect of lateral drain), for
paragraph (a) there is substituted—

(a) bind the person or persons mentioned in that subsection
to pay to the undertaker such charges as the undertaker
may impose in accordance with charging rules, and;

(d) 35subsections (4) and (5) (interest on sums deposited by way of security)
are repealed;

(e) in subsection (6) (reference of disputes to the Water Services Regulation
Authority), in paragraph (b), after “the amount” there is inserted “or
amounts by way of charges”;

(3) 40In section 101B (power to provide lateral drain following provision of public
sewer)—

(a) in subsection (3) (obligation to pay for drain requested), for “the costs
reasonably incurred in or in connection with providing that drain”
there is substituted “such charges as the undertaker may impose in
45accordance with charging rules”;

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(b) after subsection (3) there is inserted—

(3A) The sewerage undertaker may require the person making a
request under this section to provide such security for the
payment of the charges as charging rules allow.;

(c) 5in subsection (4) (reference of disputes to Authority), for paragraph (b)
there is substituted—

(b) the amount of any charge imposed,;

(d) in subsection (4), after paragraph (b) there is inserted “or

(c) the security required to be provided,.

(4) 10In section 107 (right of a sewerage undertaker to undertake the making of a
communication with a public sewer)—

(a) in subsection (3)(b)(i) (no obligation for undertaker to act until paid an
estimated cost of the work in advance), for “the cost of the work” there
is substituted “the amount by way of charges that the undertaker may
15impose in accordance with charging rules for making the connection”;

(b) in subsection (3)(b)(ii) (no obligation for undertaker to act until given
security for payment), for “such security” to the end there is substituted
“such security for the payment of that amount as charging rules allow
and it may have required.”;

(c) 20for subsection (4), there is substituted—

(4) If a payment to a sewerage undertaker under subsection (3)
exceeds the charges that may, in the event, be imposed in
accordance with charging rules for making the connection in
question, the excess is to be repaid by the undertaker; and, if
25and so far as those charges are not covered by a payment under
subsection (3), those charges are to be paid by the person for
whom the work was undertaken.;

(d) in subsection (4A) (reference to disputes to Authority), in paragraph
(a), for “of the cost of works” there is substituted “of the amount of
30charges”;

(e) in subsection (4A), for paragraph (b) (and the “or” following it) there is
substituted—

(b) the security required by the undertaker, or;

(f) in subsection (4A), for paragraph (c) there is substituted—

(c) 35whether any excess is repayable, or any charges are
payable, under subsection (4), or the amount of any such
excess or charges,.

(5) In section 146 (connection charges etc, and charges for highway drainage), in
subsection (5)(a), after “expenses incurred by it” there is inserted “, or charges
40imposed by it,”.

20 Charges for moving pipes

In section 185 of the Water Industry Act 1991 (duty to move pipes etc in certain
cases), in subsection (5) (recovery of undertaker’s expenses), for the words
from “the undertaker” to the end there is substituted “the person serving the
45notice is liable to pay to the undertaker such charges as the undertaker may
impose in accordance with charging rules”.

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Sustainable drainage

21 Drainage systems relieving public sewers

(1) After section 114 of the Water Industry Act 1991 there is inserted—

Sustainable drainage
114A 5 Drainage systems relieving public sewers

(1) Sewerage undertakers may construct, on their own or on another’s
land, drainage systems for the purpose of reducing the volume of
surface water entering public sewers or the rate at which it does so.

(2) A sewerage undertaker may maintain and operate a drainage system
10constructed by it under subsection (1).

(3) In this section—

  • “drainage system” means a structure designed to receive
    rainwater and other surface water, other than a natural
    watercourse;

  • 15“natural watercourse” means a river or stream;

  • “rainwater” includes snow and other precipitation;

  • “structure” includes—

    (a)

    any part of an existing or proposed structure, and

    (b)

    any feature or aspect of a design that is intended to
    20receive or facilitate the receipt of rainwater or other
    surface water.

(4) The powers conferred by subsections (1) and (2) are not to be regarded
as functions of a sewerage undertaker for the purposes of—

(a) section 155 (compulsory purchase of land required for the
25purposes of carrying out functions of relevant undertakers);

(b) section 156 (restrictions on disposals of land).

(2) In section 158 of that Act (powers to lay pipes in streets), in subsection (7)
(meaning of reference to a relevant pipe), in paragraph (b)—

(a) omit the “or” at the end of sub-paragraph (ii);

(b) 30after sub-paragraph (iii) there is inserted “or

(iv) any pipe forming part of, or required in
connection with, a drainage system constructed
under section 114A.

(3) In Schedule 3 to the Flood and Water Management Act 2010 (sustainable
35drainage), after paragraph 19 there is inserted—

Exception 3: systems under section 114A Water Industry Act 1991

The adoption duty does not apply to a drainage system constructed
under section 114A of the Water Industry Act 1991 (drainage systems
relieving public sewers).

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CHAPTER 3 Regulation of the water industry

General duties of the Water Services Regulation Authority

22 Primary duty to secure resilience

(1) Section 2 of the Water Industry Act 1991 (general duties with respect to water
5industry) is amended as follows.

(2) In subsection (2A)—

(a) omit the “and” at the end of paragraph (c);

(b) after paragraph (d) insert ; and

(e) to further the resilience objective.

(3) 10After subsection (2D) insert—

(2DA) The resilience objective mentioned in subsection (2A)(e) is—

(a) to secure the long-term resilience of water undertakers’ supply
systems and sewerage undertakers’ sewerage systems as
against environmental pressures, population growth and
15changes in consumer behaviour, and

(b) to secure that undertakers take steps for the purpose of enabling
them to meet, in the long term, the need for the supply of water
and the provision of sewerage services to consumers,

including by promoting appropriate long-term planning and
20investment by relevant undertakers, and the taking by them of a range
of measures to manage water resources and reduce demand.

(2DB) For the purposes of subsection (2DA)—

(a) the reference to water undertakers’ supply systems is to be
construed in accordance with section 17B;

(b) 25the reference to sewerage undertakers’ sewerage systems is a
reference to the systems comprising—

(i) the systems of public sewers, the facilities for emptying
public sewers and the sewage disposal works and other
facilities for dealing effectually with the contents of
30public sewers that undertakers are required to provide
by section 94, and

(ii) the lateral drains that undertakers are required to
maintain by section 94.

23 General duty as regards undue preference in the provision of services

35In section 2 of the Water Industry Act 1991 (general duties of the Secretary of
State and the Water Services Regulation Authority with respect to the water
industry), in subsection (3) (general considerations in exercising powers and
duties), after paragraph (b) there is inserted—

(ba) to secure that no undue preference (including for itself) is
40shown, and that there is no undue discrimination, in the doing
by such a company of—

(i) such things as relate to the provision of services by itself
or another such company, or

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(ii) such things as relate to the provision of services by a
water supply licensee or a sewerage licensee;.

24 Strategic priorities and objectives

(1) For section 2A of the Water Industry Act 1991 there is substituted—

2A 5Strategic priorities and objectives: England

(1) The Secretary of State may from time to time publish a statement
setting out strategic priorities and objectives for the Authority in
carrying out relevant functions relating wholly or mainly to England.

(2) The Authority must carry out those functions in accordance with any
10statement published under this section.

(3) In formulating a statement under this section, the Secretary of State—

(a) must have regard to the duties imposed on the Authority under
section 2, and

(b) may have regard to social and environmental matters, amongst
15other things.

(4) Before publishing a statement under this section, the Secretary of State
must consult—

(a) the Authority,

(b) the Council,

(c) 20relevant undertakers,

(d) licensed water suppliers,

(e) the Environment Agency,

(f) the Welsh Ministers, and

(g) anyone else the Secretary of State thinks appropriate.

(5) 25Before publishing a statement under this section the Secretary of State
must—

(a) lay a draft of the statement before Parliament, and

(b) then wait until the end of the 40-day period.

(6) The Secretary of State may not publish the statement under this section
30if, within the 40-day period, either House of Parliament resolves not to
approve it.

(7) “The 40-day period” means the period of 40 days beginning with the
day on which the draft is laid before Parliament (or, if it is not laid
before each House on the same day, the later of the days on which it is
35laid).

(8) When calculating the 40-day period, ignore any period during which
Parliament is dissolved or prorogued or during which both Houses are
adjourned for more than 4 days.

(9) In this section “relevant functions relating wholly or mainly to
40England” means the functions mentioned in section 2(1)(b) so far as
they relate to appointment areas wholly or mainly in England.

(10) In subsection (9) “appointment area” means an area for which an
appointment is held under Chapter 1 of Part 2.

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2B Strategic priorities and objectives: Wales

(1) The Welsh Ministers may from time to time publish a statement setting
out strategic priorities and objectives for the Authority in carrying out
relevant functions relating wholly or mainly to Wales.

(2) 5The Authority must carry out those functions in accordance with any
statement published under this section.

(3) In formulating a statement under this section the Welsh Ministers—

(a) must have regard to the duties imposed on the Authority under
section 2, and

(b) 10may have regard to social and environmental matters, amongst
other things.

(4) Before publishing a statement under this section, the Welsh Ministers
must consult—

(a) the Authority,

(b) 15the Council,

(c) relevant undertakers,

(d) licensed water suppliers,

(e) the NRBW,

(f) the Secretary of State, and

(g) 20anyone else the Welsh Ministers think appropriate.

(5) Before publishing a statement under this section the Welsh Ministers
must—

(a) lay a draft of the statement before the Assembly, and

(b) then wait until the end of the 40-day period.

(6) 25The Welsh Ministers may not publish the statement under this section
if, within the 40-day period, the Assembly resolves not to approve it.

(7) “The 40-day period” means the period of 40 days beginning with the
day on which the draft is laid before the Assembly.

(8) When calculating the 40-day period, ignore any period during which
30the Assembly is dissolved or is in recess for more than 4 days.

(9) In this section “relevant functions relating wholly or mainly to Wales”
means the functions mentioned in section 2(1)(b) so far as they relate to
appointment areas wholly or mainly in Wales.

(10) In subsection (9) “appointment area” means an area for which an
35appointment is held under Chapter 1 of Part 2.

(2) In section 2(6A), (6B) and (7) of that Act (general duties with respect to water
industry), for “section 2A” there is substituted “sections 2A and 2B”.

(3) In section 192A of that Act (forward work programme), after subsection (3)
there is inserted—

(3A) 40The forward work programme for any year must also include an
explanation of how the projects described in it reflect any strategic
priorities or objectives published under section 2A or 2B.

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Regulation of relevant undertakers, water supply licensees and sewerage licensees

25 Procedure for granting water supply and sewerage licences

(1) Section 17F of the Water Industry Act 1991 (procedure for granting water
supply licences) is amended as follows.

(2) 5For subsection (1) (application to be made as set out in regulations) there is
substituted—

(1) The Authority must determine for each type of relevant application
that may be made—

(a) the form and manner in which an application is to be made;

(b) 10the information it is to contain;

(c) the documents that are to accompany it;

(d) the fee that is to accompany it.

(1A) The fees may be different in different circumstances.

(1B) The Authority may make a new determination as to a matter referred
15to in subsection (1).

(1C) The Authority must publish a notice of what it has determined under
subsection (1) or (1B) in such manner as it thinks appropriate for
bringing the determination to the attention of those affected by the
determination.

(1D) 20For the purposes of subsection (1) a relevant application is an
application for—

(a) the grant of a water supply or sewerage licence giving a
particular authorisation or combination of authorisations;

(b) the variation of a water supply or sewerage licence so that it
25gives—

(i) a particular authorisation only, or

(ii) a particular combination of authorisations.

(1E) A person making a relevant application must comply with such
provisions of a notice published under subsection (1C) as relate to the
30application.

(3) Subsections (2), (3) and (5) (requirement for applicant to publish notice of an
application made) are repealed.

(4) In subsection (4) (procedure where the Secretary of State or the Authority
proposes to refuse an application), for “the application”, in the first place it
35occurs, there is substituted “a relevant application”.

26 Extension of time limit for imposing financial penalties

(1) In section 22C of the Water Industry Act 1991 (time limits on the imposition of
financial penalties), in subsection (1), for “twelve months” there is substituted
“five years”.

(2) 40But subsection (1) does not apply in relation to a contravention or failure
which—

(a) occurred before the date on which this section comes into force, and