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110B Variation and termination of main connection agreements

(1) On the application of any party to a main connection agreement, the
Authority may—

(a) if it appears to the Authority that it is necessary or expedient for
5the purpose of this Part that the main connection agreement
should be varied or terminated, and

(b) if the Authority is satisfied that variation or termination cannot
be achieved by agreement,

by order vary or terminate the main connection agreement.

(2) 10Before making an order under subsection (1), the Authority must
consult the appropriate agency.

(3) If an order under subsection (1) is made in relation to a main connection
agreement, the agreement—

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

(b) 15ceases to have effect (as the case may be).

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

(5) Neither the CMA nor the Authority may exercise, in respect of an
agreement to vary or terminate a main connection agreement, the
20powers conferred by—

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

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

(6) Subsection (5)(b) does not apply to the exercise of powers in respect of
25conduct—

(a) which is connected with an agreement to vary or terminate a
main connection agreement, and

(b) in respect of which section 35(1) of the Competition Act 1998
applies because of an investigation under section 25 of that Act
30relating to a suspected infringement of the Chapter 2
prohibition imposed by section 18(1) of that Act.

(7) In exercising its functions under this section, the Authority must have
regard to the expenses incurred by the established undertaker in
complying with its obligations under the main connection agreement in
35question and to the desirability of—

(a) facilitating effective competition within the sewerage services
industry;

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

(c) the established undertaker’s being able to meet its existing
obligations, and likely future obligations, to provide sewerage
services without having to incur unreasonable expenditure in
carrying out works;

(d) 45not putting at risk the ability of the established undertaker to
meet its existing obligations, or likely future obligations, to
provide such services.

(8) In this section and sections 110C to 110J—

110C Codes in respect of main connection agreements

(1) The Authority may issue one or more codes in respect of main
15connection agreements.

(2) A code may make provision about—

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

(b) 20procedures in connection with varying or terminating a main
connection 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,
25including terms as to the duration of such an agreement;

(e) principles 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
30person is complying with the code.

(3) 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.

(4) The Authority may not give a direction under subsection (3) requiring
35a person to enter into, vary or terminate an agreement.

(5) 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.

(6) A code may make different provision for different persons or different
40descriptions of person.

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

(8) A revised code may include provision for applying any of its revisions
to main connection agreements made before the revised code comes
45into force.

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110D Codes under section 110C: procedure

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

(a) prepare a draft of the proposed code under section 110C, and

(b) consult such persons about the proposed code as it considers
5appropriate.

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

(3) Before a code under section 110C prepared by the Authority is issued,
10the Minister may direct the Authority—

(a) not to issue the code, or

(b) to issue the code with specified modifications.

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

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

(a) 15the 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) each such connection,

is or would be a main connection into the sewerage system of a
20sewerage 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
relates to main connection agreements under which—

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

(ii) 25each 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
for the benefit of another such undertaker;

(c) the Secretary of State and the Welsh Ministers acting jointly, so
30far 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) a main connection into the sewerage system of a
sewerage undertaker whose area is wholly or mainly in
35England 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
sewerage undertaker whose area is wholly or mainly in
Wales for the benefit of a sewerage undertaker whose
40area 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
paragraph (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
45paragraph.

(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

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may be so exercised, it may not be exercised in respect of such main
connection 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
5days 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
issued 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
10under section 110C 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) 15Section 110D does not apply to the 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
20the 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
Authority considers appropriate.

(5) Unless the Authority gives notice that a revision in a revised code is in
25the 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 is issued.

110F Rules about charges for permitting main connections

(1) The Authority may issue rules about charges that may be imposed by a
30sewerage undertaker under a main connection agreement.

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

(a) what 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
35charge;

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

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

(e) 40publication of the charges 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
undertaker 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 revise rules issued under this
10section and issue revised rules.

(7) The Authority must issue revised rules if—

(a) guidance is issued under section 110J, and

(b) the Authority, having regard to that guidance, considers that it
is appropriate to revise the rules.

(8) 15Revised 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) Rules under section 110F may provide for the reduction of charges
20payable 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
connection agreement;

(b) 25require 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
who—

(i) 30is 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
accordance with rules made by virtue of subsection (1), the sewerage
35undertaker 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) specify the period within which an undertaker is to give notice
40to 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
charge;

(b) 45the amount of the charge, with and without the reduction;

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

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110H Rules under section 110F: procedure

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

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

(b) consult such persons about the proposed rules as it thinks
5appropriate.

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

(3) The Authority must have regard to guidance issued under section 110J
10in making rules under section 110F.

(4) Before rules under section 110F prepared by the Authority are issued,
the Minister may direct the Authority not to issue the rules.

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

(a) the Secretary of State, so far as rules prepared by the Authority
15relate 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
20England for the benefit of another such undertaker;

(b) the 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,

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, so
far as rules prepared by the Authority relate to main connection
30agreements under which one main connection 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
35area is wholly or mainly in Wales, or

(ii) a 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) 40A 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 rules may not be issued before that period of 28 days has expired.

(7) This section is subject to section 110I.

110I Rules under section 110F: minor or urgent revisions

(1) 45This section applies if the Authority proposes to issue revised rules
under section 110F and, in the view of the Authority, the revision or
each of the revisions proposed to be made is—

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

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

(2) Section 110H does not apply to the proposed revised rules.

(3) 5Before issuing the revised rules, the Authority must give notice to the
Minister of its intention to issue revised rules.

(4) Before the revised rules are issued, the Minister may direct the
Authority not to issue the revised rules.

(5) A direction under subsection (4) must be given within the period of 14
10days beginning with the day after the day on which notice is given
under subsection (3), and the Authority may not issue the revised rules
in question before—

(a) that period of 14 days expires, or

(b) the Minister notifies the Authority that no direction under
15subsection (4) will be given in relation to the revised rules,

whichever is the sooner.

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

(a) the issuing of the revised rules, and

(b) 20as regards each revision contained in them, whether in the view
of the Authority the revision falls within paragraph (a) or (b) of
subsection (1).

(7) Notice under subsection (6) is to be given to such persons as the
Authority considers appropriate.

(8) 25Unless the Authority gives notice that a revision in revised rules 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 rules are issued.

(9) In this section “the Minister” has the meaning given by section 110H.

110J 30Rules under section 110F: guidance

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

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

(a) prepare a draft of the proposed guidance;

(b) 35consult the relevant persons about the draft.

(3) The relevant persons are—

(a) the Welsh Ministers;

(b) the Secretary of State;

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

(4) 40The 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
original guidance.

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(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
5under 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
10England 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,

15is 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
20connection 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) 25a 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 110J of the Water Industry Act 1991 (as substituted by
30subsection (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) 35For 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
permit a main connection into its sewerage system, and includes an
40order 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
section had effect before being substituted under subsection (1).

Agreements to adopt infrastructure

10 45Agreements by water undertakers to adopt infrastructure

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

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

(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
5“request a water undertaker to make an agreement under this section.”;

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

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

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

(a) 10an order under section 51B which is deemed to be an
agreement by virtue of section 51B(5), and

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

(3) For section 51B (appeals with respect to adoption) and section 51C (financial
15conditions of compliance) there is substituted—

51B Adoption at a future date: orders by Authority

(1) This 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) 20The person or the water undertaker may apply to the Authority for an
order under subsection (4) if the person and the water undertaker have
not 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
25satisfied that—

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

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

(4) 30The Authority may by order—

(a) require the water undertaker to give such undertakings as to the
vesting 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
35of the undertakings as the Authority may specify.

(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
40which 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) 45that other undertaker has consented in writing to the making of
the order, or

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(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) “The Minister” means—

(a) 5the 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) Neither the CMA nor the Authority may exercise, in respect of an
10agreement 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) section 35(2) of that Act (interim directions).

(10) 15Subsection (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) in respect of which section 35(1) of the Competition Act 1998
20applies 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
regard to the desirability of—

(a) 25facilitating 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
securing a reasonable return on its capital;

(c) 30the 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) not putting at risk the ability of the water undertaker to meet its
35existing obligations, or likely future obligations, to supply
water.

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) 40if it appears to the Authority that it is necessary or expedient
that 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
45done by a person other than the water undertaker to be so done,
and

(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.

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