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(b) provide for a requirement so imposed to be enforceable under
section 18 by—

(i) the Secretary of State, or

(ii) the Authority, with the consent of or in accordance with
5a general authorisation given by the Secretary of State.

(2) The Secretary of State may, in accordance with section 39ZA, by
regulations prescribe such standards of performance in connection
with the provision of supplies of water as, in the Secretary of State’s
opinion, ought to be achieved in individual cases.

(3) 10Regulations under subsection (2) may provide that if a water supply
licensee fails to meet a prescribed standard the licensee must pay such
amount as may be prescribed to any person who—

(a) is affected by the failure, and

(b) is of a prescribed description.

(4) 15Without prejudice to the generality of the power conferred by
subsection (2), regulations under subsection (2) may—

(a) include in a standard of performance a requirement for a water
supply licensee, in prescribed circumstances, to inform a person
of that person’s rights by virtue of any such regulations;

(b) 20provide for a dispute under the regulations to be referred by
either party to the dispute to the Authority;

(c) make provision for the procedure to be followed in connection
with any such reference and for the Authority’s determination
on such a reference to be enforceable in such manner as may be
25prescribed;

(d) prescribe circumstances in which a water supply licensee is to
be exempted from requirements of the regulations.

(5) Where the Authority determines any dispute in accordance with
regulations under this section it must, in such manner as may be
30specified in the regulations, give its reasons for reaching its decision
with respect to the dispute.

(2) Section 38A of that Act (information as to levels of performance of water
undertakers) is amended in accordance with subsections (3) to (6).

(3) In subsection (1) (duty of Water Services Regulation Authority to collect
35information)—

(a) the “and” following paragraph (a) is repealed;

(b) after paragraph (a) there is inserted—

(aa) the compensation paid by water supply licensees under
regulations under section 38ZA(2); and;

(c) 40in paragraph (b), after “water undertakers” there is inserted “or water
supply licensees”.

(4) After subsection (2) there is inserted—

(2A) At such times as the Authority may direct, each water supply licensee
is to give the following information to the Authority—

(a) 45as respects each standard established by regulations under
section 38ZA(1), such information with respect to the level of
performance achieved by the licensee as may be prescribed;

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(b) as respects each standard prescribed by regulations under
section 38ZA(2), the number of cases in which compensation
was paid and the aggregate amount or value of that
compensation.

(5) 5For subsection (3) (offence of failing to comply with subsection (2)) there is
substituted—

(3) The requirements in subsections (2) and (2A) are enforceable by the
Authority under section 18.

(6) In subsection (4) (publication of information collected), after “water
10undertakers” there is inserted “or water supply licensees”.

(7) After section 39 there is inserted—

39ZA Procedure for regulations under section 38ZA

(1) Section 39 applies for the purposes of making regulations under section
38ZA as it applies for the purposes of making regulations under section
1538.

(2) In the application of section 39 by virtue of subsection (1), a reference to
a water undertaker is to be treated as a reference to a water supply
licensee.

30 Standards of performance: sewerage

(1) 20After section 95 of the Water Industry Act 1991 there is inserted—

95ZA Standards of performance in connection with provision of sewerage
services: sewerage licensees

(1) For the purpose of establishing overall standards of performance in
connection with the provision of sewerage services by sewerage
25licensees in accordance with their retail authorisations, the Secretary of
State may, in accordance with section 96ZA, by regulations—

(a) impose requirements in connection with the provision of
sewerage services;

(b) provide for a requirement so imposed to be enforceable under
30section 18 by—

(i) the Secretary of State, or

(ii) the Authority, with the consent of or in accordance with
a general authorisation given by the Secretary of State.

(2) The Secretary of State may, in accordance with section 96ZA, by
35regulations prescribe such standards of performance in connection
with the provision of sewerage services as, in the Secretary of State’s
opinion, ought to be achieved in individual cases.

(3) Regulations under subsection (2) may provide that if a sewerage
licensee fails to meet a prescribed standard the licensee must pay such
40amount as may be prescribed to any person who—

(a) is affected by the failure, and

(b) is of a prescribed description.

(4) Without prejudice to the generality of the power conferred by
subsection (2), regulations under subsection (2) may—

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(a) include in a standard of performance a requirement for a
sewerage licensee, in prescribed circumstances, to inform a
person of that person’s rights by virtue of any such regulations;

(b) provide for a dispute under the regulations to be referred by
5either party to the dispute to the Authority;

(c) make provision for the procedure to be followed in connection
with any such reference and for the Authority’s determination
on such a reference to be enforceable in such manner as may be
prescribed;

(d) 10prescribe circumstances in which a sewerage licensee is to be
exempted from requirements of the regulations.

(5) Where the Authority determines any dispute in accordance with
regulations under this section it must, in such manner as may be
specified in the regulations, give its reasons for reaching its decision
15with respect to the dispute.

(2) Section 95A of that Act (information as to levels of performance of sewerage
undertakers) is amended in accordance with subsections (3) to (6).

(3) In subsection (1) (duty of Water Services Regulation Authority to collect
information)—

(a) 20the “and” following paragraph (a) is repealed;

(b) after paragraph (a) there is inserted—

(aa) the compensation paid by sewerage licensees under
regulations under section 95ZA(2); and;

(c) in paragraph (b), after “sewerage undertakers” there is inserted “or
25sewerage licensees”.

(4) After subsection (2) there is inserted—

(2A) At such times as the Authority may direct, each sewerage licensee is to
give the following information to the Authority—

(a) as respects each standard established by regulations under
30section 95ZA(1), such information with respect to the level of
performance achieved by the licensee as may be prescribed;

(b) as respects each standard prescribed by regulations under
section 95ZA(2), the number of cases in which compensation
was paid and the aggregate amount or value of that
35compensation.

(5) For subsection (3) (offence of failing to comply with subsection (2)) there is
substituted—

(3) The requirements in subsections (2) and (2A) are enforceable by the
Authority under section 18.

(6) 40In subsection (4) (publication of information collected), after “sewerage
undertakers” there is inserted “or sewerage licensees”.

(7) After section 96 there is inserted—

96ZA Procedure for regulations under section 95ZA

(1) Section 96 applies for the purposes of making regulations under section
4595ZA as it applies for the purposes of making regulations under section
95.

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(2) In the application of section 96 by virtue of subsection (1), a reference to
a sewerage undertaker is to be treated as a reference to a sewerage
licensee.

31 Interim duty: water supply

5For section 63AC of the Water Industry Act 1991 (interim duty of water
undertaker: domestic and non-domestic supply) there is substituted—

63AC Interim duty: domestic and non-domestic supply

(1) This section applies where—

(a) a water supply licensee (“the previous licensee”) ceases to
10supply any premises with water, and

(b) the owner or occupier of the premises has not notified the water
undertaker in whose area the premises are that—

(i) he has made arrangements for the continuation of the
supply of water to the premises, or

(ii) 15he intends any supply of water to the premises to cease.

(2) It is to be the duty of the water undertaker to continue the supply of
water to the premises which was made by the previous licensee.

(3) But the Authority may give a direction to an eligible water supply
licensee (“an interim licensee”) providing that it is to be the duty of that
20licensee to continue the supply instead.

(4) An “eligible water supply licensee” is a water supply licensee with a
retail authorisation or a restricted retail authorisation who has elected
to be an eligible water supply licensee for the purposes of this section
in accordance with the code issued under section 63AF.

(5) 25If the Authority proposes to give a direction under subsection (3) to an
eligible water supply licensee—

(a) the Authority must give notice of the proposed direction to the
licensee, and

(b) the licensee may, in accordance with the code issued under
30section 63AF, temporarily suspend the election made by the
licensee as mentioned in subsection (4), so that the proposed
direction cannot be given to the licensee.

(6) Where a supply is made by an undertaker under subsection (2)—

(a) the charges payable in respect of the supply are to be fixed from
35time to time by a charges scheme under section 143, and

(b) subject to subsection (12), the supply is to be made until—

(i) a supply is made by an interim licensee by virtue of a
direction under subsection (3),

(ii) a supply is made by a water supply licensee following
40the service of a notice under section 63AA or 63AB;

(iii) a supply is made under section 52 or 55, or

(iv) a notice is served by the undertaker on the owner or
occupier of the premises stating that the supply is to be
discontinued (subject to subsection (8)),

45whichever is the earlier.

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(7) Where a supply is made by an interim licensee by virtue of a direction
given under subsection (3)—

(a) the supply by the interim licensee is to be treated as having
begun on the date on which the previous licensee ceased to
5supply the premises,

(b) the terms and conditions in accordance with which the supply
is to be made are to be—

(i) those provided for by a scheme made under section
63AE, or

(ii) 10such other terms and conditions as may be agreed
between the interim licensee and the owner or occupier
of the premises, and

(c) subject to subsection (12), the supply is to be made until it is
discontinued in accordance with the terms and conditions
15mentioned in paragraph (b).

(8) A notice under subsection (6)(b)(iv) may not be served before the end
of the period of three months beginning with the day on which the
supply by the previous licensee ceased.

(9) Subsections (10) and (11) apply if, within a period of three months
20beginning with the date on which the previous licensee ceased to
supply the premises with water, the owner or occupier of the premises
serves notice—

(a) under section 63AA or 63AB, on the water undertaker
continuing the supply under subsection (2), or

(b) 25in accordance with the terms and conditions mentioned in
subsection (7)(b), on the interim licensee continuing the supply
by virtue of a direction given under subsection (3),

that instead another water supply licensee (“the new licensee”) is to
continue the supply of water to the premises which was made by the
30previous licensee.

(10) The notice must—

(a) specify the time from which the new licensee is to continue the
supply in question, and

(b) be served in accordance with the code issued under section
3563AF.

(11) In the case of a notice served as mentioned in subsection (9)(a), the
supply by the new licensee is to be treated as having begun on the date
on which the previous licensee ceased to supply the premises.

(12) Supplies of water under this section are subject to sections 60 to 63.

63AD 40 Interim duty: supplementary

(1) A water undertaker is not required by virtue of section 63AC to provide
a supply of water to any premises if the provision of the supply
would—

(a) require the undertaker, in order to meet all its existing
45obligations to supply water for domestic or other purposes,
together with its probable future obligations to supply
buildings and parts of buildings with water for domestic
purposes, to incur unreasonable expenditure in carrying out
works, or

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(b) otherwise put at risk its ability to meet any of the existing or
probable future obligations mentioned in paragraph (a).

(2) The Authority may determine, in a case referred to it by the owner or
occupier of the premises in question, whether the condition in
5subsection (1) is satisfied in relation to a water undertaker.

(3) Before the Authority determines whether that condition is satisfied, it
must consult—

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

(b) 10the Welsh Ministers, in the case of a water undertaker whose
area is wholly or mainly in Wales.

(4) The supply of water to any premises by a water undertaker under
section 63AC does not prevent a proposed supply to those premises by
that undertaker under section 55 from being regarded as a new supply
15for the purposes of that section.

(5) Where a duty is imposed by section 63AC(2), or by virtue of a direction
given under section 63AC(3), in respect of any premises, any breach of
the duty which causes the owner or occupier of the premises to sustain
loss or damage is actionable at the suit of that owner or occupier.

(6) 20But in any proceedings brought against a water undertaker or water
supply licensee in pursuance of subsection (5), it is a defence for the
undertaker or licensee to show that the undertaker or, as the case may
be, the licensee took all reasonable steps and exercised all due diligence
to avoid the breach.

63AE 25 Interim licensees: schemes for terms and conditions

(1) A person who is an eligible water supply licensee for the purposes of
section 63AC must make, and from time to time revise, a scheme
containing the terms and conditions which, in the absence of agreed
terms and conditions, are to apply to a supply of water made by the
30licensee by virtue of a direction given under section 63AC(3).

(2) A scheme under this section may make different provision for different
purposes, or for different areas.

(3) As soon as practicable after a water supply licensee makes or revises a
scheme under this section the licensee is to—

(a) 35publish the scheme, or revised scheme, on the licensee’s
website, and

(b) send a copy of the scheme, or revised scheme, to the Authority.

(4) The Authority may give a direction that terms and conditions applying
to a supply of water in accordance with a scheme under this section
40must be modified as specified in the direction.

(5) A direction under subsection (4) may apply—

(a) generally to terms and conditions applying in accordance with
a scheme under this section, or

(b) to terms and conditions so applying in any particular case.

(6) 45It is the duty of a water supply licensee to comply with a direction
under subsection (4), and this duty is enforceable under section 18.

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63AF Interim duty: code

(1) The Authority must issue a code in relation to—

(a) supplies of water under section 63AC, and

(b) its power of direction under section 63AC(3) (power to direct
5that eligible water supply licensee makes interim supply).

(2) The code may, in particular, make provision about—

(a) the procedure for electing to be an eligible water supply licensee
for the purposes of section 63AC;

(b) the procedure for temporarily suspending such an election
10under section 63AC(5)(b);

(c) the circumstances in which the Authority’s power of direction
under section 63AC(3) or 63AE(4) may or may not be exercised;

(d) how the Authority will determine the date on which a water
supply licensee ceased to supply premises with water for the
15purposes of section 63AC;

(e) terms and conditions contained in schemes made under section
63AE;

(f) eligible water supply licensees informing owners or occupiers
of premises of their schemes for terms and conditions made
20under section 63AE, before agreeing any terms and conditions
as mentioned in section 63AC(7)(b)(ii);

(g) the giving of notices as mentioned in section 63AC(9) (that a
new licensee is to continue the supply of water made by the
previous licensee) including, in particular, provision about—

(i) 25the earliest time that a notice may specify as the time
from which a new licensee is to continue the supply of
water made by a previous licensee;

(ii) the procedure for serving a notice.

(3) If the Authority considers that a water supply licensee is not acting as
30required by provision contained in a code as mentioned in subsection
(2)(e) or (f), the Authority may give the licensee a direction to do, or not
to do, a particular thing specified in the direction.

(4) It is the duty of a water supply licensee to comply with a direction
under subsection (3), and this duty is enforceable under section 18.

(5) 35The Authority must from time to time review the code and, if
appropriate, issue a revised code.

(6) References in section 63AC to the code issued under this section are to
the code issued under this section that has effect at the time in
question.

32 40Interim duty: sewerage services

After section 110J of the Water Industry Act 1991 (as inserted by section 9) there

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is inserted—

Provision of sewerage services by sewerage licensees etc
110K Provision by sewerage licensee

(1) The owner or occupier of any premises may serve a notice on a
5sewerage undertaker—

(a) informing the undertaker that sewerage services to the
premises are to be provided by a sewerage licensee, and

(b) specifying the time after which the undertaker will no longer be
required to provide sewerage services to the premises.

(2) 10Where the charges for the sewerage services provided by the
undertaker are, under Chapter 1 of Part 5 of this Act, fixed in relation
to the premises by reference to volume, the time specified in the notice
is to fall at least two working days after the notice is served.

(3) In this section a reference to two working days is a reference to a period
15of 48 hours calculated after disregarding any time falling on—

(a) a Saturday or Sunday, or

(b) Christmas Day, Good Friday or any day which is a bank holiday
in England and Wales under the Banking and Financial
Dealings Act 1971.

110L 20 Interim duty: sewerage undertakers and sewerage licensees

(1) This section applies where—

(a) a sewerage licensee (“the previous licensee”) ceases to provide
sewerage services to any premises, and

(b) the owner or occupier of the premises has not notified the
25sewerage undertaker in whose area the premises are that—

(i) he has made arrangements for the continuation of the
provision of sewerage services to the premises, or

(ii) he intends any provision of sewerage services to the
premises to cease.

(2) 30It is to be the duty of the sewerage undertaker to continue to provide
the sewerage services to the premises which were provided by the
previous licensee.

(3) But the Authority may give a direction to an eligible sewerage licensee
(“an interim licensee”) providing that it is to be the duty of that licensee
35to provide the sewerage services instead.

(4) An “eligible sewerage licensee” is a sewerage licensee with a retail
authorisation who has elected to be an eligible sewerage licensee for the
purposes of this section in accordance with the code issued under
section 110O.

(5) 40If the Authority proposes to give a direction under subsection (3) to an
eligible sewerage licensee—

(a) the Authority must give notice of the proposed direction to the
licensee, and

(b) the licensee may, in accordance with the code issued under
45section 110O, temporarily suspend the election made by the

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licensee as mentioned in subsection (4), so that the proposed
direction cannot be given to the licensee.

(6) Where sewerage services are provided by an undertaker under
subsection (2)—

(a) 5the charges payable in respect of the provision of the services
are to be fixed from time to time by a charges scheme under
section 143, and

(b) the services are to be provided until—

(i) services are provided by an interim licensee by virtue of
10a direction under subsection (3), or

(ii) services are provided by a sewerage licensee following
the service of a notice under section 110K,

whichever is the earlier.

(7) Where sewerage services are provided by an interim licensee by virtue
15of a direction given under subsection (3)—

(a) the provision of services by the interim licensee is to be treated
as having begun on the date on which the previous licensee
ceased to provide services to the premises,

(b) the terms and conditions in accordance with which the services
20are to be provided are to be—

(i) those provided for by a scheme made under section
110N, or

(ii) such other terms and conditions as may be agreed
between the interim licensee and the owner or occupier
25of the premises, and

(c) the services are to be provided until they are discontinued in
accordance with the terms and conditions mentioned in
paragraph (b).

(8) Subsections (9) and (10) apply if, within a period of three months
30beginning with the date on which the previous licensee ceased to
provide sewerage services to the premises, the owner or occupier of the
premises serves notice—

(a) under section 110K, on the sewerage undertaker continuing the
provision of services under subsection (2), or

(b) 35in accordance with the terms and conditions mentioned in
subsection (7)(b), on the interim licensee continuing the
provision of services by virtue of a direction given under
subsection (3),

that instead another sewerage licensee (“the new licensee”) is to
40continue the provision of the services to the premises which were
provided by the previous licensee.

(9) The notice must—

(a) specify the time from which the new licensee is to continue the
provision of the services in question, and

(b) 45be served in accordance with the code issued under section
110O.

(10) In the case of a notice served as mentioned in subsection (8)(a), the
provision of services by the new licensee is to be treated as having

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begun on the date on which the previous licensee ceased to provide
services to the premises.

110M Interim duty: supplementary

(1) Where a duty is imposed by section 110L(2), or by virtue of a direction
5given under section 110L(3), in respect of any premises, any breach of
the duty which causes the owner or occupier of the premises to sustain
loss or damage is actionable at the suit of that owner or occupier.

(2) But in any proceedings brought against a sewerage undertaker or
sewerage licensee in pursuance of subsection (1), it is a defence for the
10undertaker or licensee to show that the undertaker or, as the case may
be, the licensee took all reasonable steps and exercised all due diligence
to avoid the breach.

110N Interim licensees: schemes for terms and conditions

(1) A person who is an eligible sewerage licensee for the purposes of
15section 110L must make, and from time to time revise, a scheme
containing the terms and conditions which, in the absence of agreed
terms and conditions, are to apply to the provision of sewerage services
by the licensee by virtue of a direction given under section 110L(3).

(2) A scheme under this section may make different provision for different
20purposes, or for different areas.

(3) As soon as practicable after a sewerage licensee makes or revises a
scheme under this section the licensee is to—

(a) publish the scheme, or revised scheme, on the licensee’s
website, and

(b) 25send a copy of the scheme, or revised scheme, to the Authority.

(4) The Authority may give a direction that terms and conditions applying
to the provision of sewerage services in accordance with a scheme
under this section must be modified as specified in the direction.

(5) A direction under subsection (4) may apply—

(a) 30generally to terms and conditions applying in accordance with
a scheme under this section, or

(b) to terms and conditions so applying in any particular case.

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

110O 35 Interim duty: code

(1) The Authority must issue a code in relation to—

(a) the provision of sewerage services under section 110L, and

(b) its power of direction under section 110L(3) (power to direct
that eligible sewerage licensee provides interim sewerage
40services).

(2) The code may, in particular, make provision about—

(a) the procedure for electing to be an eligible sewerage licensee for
the purposes of section 110L;

(b) the procedure for temporarily suspending such an election
45under section 110L(5)(b);

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