14201.5-11

House of Commons

Session 2013 - 14
Internet Publications
Other Bills before Parliament

Lords Amendments to the Water Bill

5

Clause 37
49
Page 86, line 32, at end insert—

“( )
In section 213 (powers to make regulations), in subsection (1A) (affirmative

resolution procedure to apply on first exercise of power), for “each of

sections 89 and 90 above, the instrument” there is substituted “—

(a)
each of sections 89 and 90, and

(b)
each of sections 207A and 207C and Schedule 16;


the instrument”.”
Clause 39
50
Page 90, line 45, leave out from “section” to “House” in line 46 and insert “may not

be made unless a draft of the instrument has been laid before, and approved by a

resolution of, each”
51
Page 90, line 48, leave out from “section” to “the” in line 49 and insert “may not be

made unless a draft of the instrument has been laid before, and approved by a

resolution of,”
52
Page 91, leave out lines 1 to 13
After Clause 41
53
Insert the following new Clause—

“Chapter 3A

Retail exit: non-household premises

Retail exit: non-household premises

(1)
The Secretary of State may by regulations (“exit regulations”)—

(a)
make provision for a relevant undertaker whose area is wholly or

mainly in England to apply to withdraw from the non-household

retail market in relation to that area;

(b)
make provision about the determination of an application under

paragraph (a) (an “exit application”),

(c)
make provision for and in connection with the transfer of so much

of a relevant undertaker’s undertaking as relates to the non-

household retail market to an eligible licensee or licensees, and

(d)
make provision about the operation of the water industry in

relation to an area in respect of which an exit application has been

granted (a “retail exit area”).

(2)
Provision under subsection (1)(a) may require a company that is a water

undertaker and a sewerage undertaker to make an exit application that

relates both to its functions as a water undertaker and to its functions as a

sewerage undertaker, subject to such exceptions as exit regulations may

specify.

(3)
Exit regulations may include provision for protecting customers affected

by a relevant undertaker’s withdrawal from the non-household retail

market.

(4)
For the purposes of this Chapter—

6

(a)
a reference to a water undertaker withdrawing from the non-

household retail market in relation to an area is a reference to a

water undertaker ceasing, in relation to that area, to exercise such

functions relating to the supply of water to non-household

premises as are specified in exit regulations, and

(b)
a reference to a sewerage undertaker withdrawing from the non-

household retail market in relation to an area is a reference to a

sewerage undertaker ceasing, in relation to that area, to exercise

such functions relating to the provision of sewerage services in

respect of non-household premises (including trade effluent

functions) as are specified in exit regulations;


and a reference to the non-household retail market is to be construed

accordingly.

(5)
Exit regulations may—

(a)
prohibit a water undertaker from exercising, in relation to a retail

exit area, such functions relating to the supply of water to non-

household premises as are specified in the regulations;

(b)
prohibit a sewerage undertaker from exercising, in relation to a

retail exit area, such functions relating to the provision of sewerage

services in respect of non-household premises (including trade

effluent functions) as are specified in the regulations.”
54
Insert the following new Clause—

“Application for retail exit

(1)
Exit regulations about exit applications must make provision requiring a

relevant undertaker to apply to the Secretary of State, and may include—

(a)
provision requiring a relevant undertaker to take such steps as the

regulations may specify before making an application;

(b)
provision as to the form and manner in which an application is to

be made and as to the contents of an application;

(c)
provision about payment to the Secretary of State of a fee of an

amount specified in or determined under the regulations;

(d)
provision about the information that is to accompany an

application;

(e)
provision for the Secretary of State to require a relevant undertaker

to provide such further information as the Secretary of State may

require in order to make a determination;

(f)
provision as to the grounds on which an application may be

refused;

(g)
provision for the Secretary of State to grant an application subject to

conditions.

(2)
Provision under subsection (1)(a) may require a relevant undertaker—

(a)
to consult—

(i)
its non-household customers and its other customers,

(ii)
the WSRA,

(iii)
the Chief Inspector of Drinking Water,

(iv)
the Consumer Council for Water, and

(v)
any other person specified in the regulations;

7

(b)
to prepare and publish a report assessing the effect on non-

household customers and other customers if the undertaker

withdraws from the non-household retail market;

(c)
to publish notice of its proposed exit application in such manner as

the regulations may specify.

(3)
The grounds that may be specified under subsection (1)(f) include—

(a)
grounds relating to the public interest or to the interests of a section

of the public;

(b)
grounds relating to the interests of non-household customers or

other customers;

(c)
grounds relating to costs associated with a transfer of part of the

relevant undertaker’s undertaking;

(d)
grounds relating to the eligible licensee or licensees to which a

transfer of part of the relevant undertaker’s undertaking is

proposed to be made.

(4)
The conditions that may be imposed under subsection (1)(g) include—

(a)
conditions as to the persons who are to pay the costs associated

with a transfer of a part of the relevant undertaker’s undertaking;

(b)
conditions as to the application of money received by the relevant

undertaker in connection with a transfer of a part of its

undertaking;

(c)
conditions about the relevant undertaker giving consent to

modifications of the undertaker’s conditions of appointment;

(d)
conditions about an eligible licensee to which a transfer of part of

the relevant undertaker’s undertaking is proposed to be made

giving consent to modifications of the conditions of its water supply

licence or sewerage licence;

(e)
conditions about the treatment of non-household customers

affected by the transfer of part of the relevant undertaker’s

undertaking.

(5)
Exit regulations may make provision about how particular descriptions of

customers and premises are affected by a relevant undertaker’s

withdrawal from the non-household retail market, including in particular

any of the following—

(a)
premises to which the supply of water has been disconnected,

(b)
premises that are to be demolished,

(c)
premises that are temporarily unoccupied,

(d)
premises in relation to which the owner or occupier has served

notice under section 63AA of the Water Industry Act 1991 (supply

by water supply licensee: domestic supply),

(e)
premises in relation to which the owner or occupier has served

notice under section 63AB of the Water Industry Act 1991 (supply

by water supply licensee: non-domestic supply), and

(f)
premises in relation to which the owner or occupier has served

notice under section 110K of the Water Industry Act 1991 (provision

by sewerage licensee).

(6)
Provision under subsection (5) may include provision about how exit

applications deal with particular descriptions of customers and premises.

(7)
Exit regulations may make provision about the disclosure by a relevant

undertaker of such information as the regulations may specify about—

8

(a)
its non-household customers, and

(b)
the charges payable by them (whether payable under a charges

scheme under section 143 of the Water Industry Act 1991 or under

an agreement).

(8)
Exit regulations may specify—

(a)
the persons to whom the information may be disclosed;

(b)
the purposes for which it may be disclosed.”
55
Insert the following new Clause—

“Eligible licensees

(1)
Exit regulations may—

(a)
make provision for a relevant undertaker to specify in its exit

application the eligible licensee or licensees to which it proposes to

transfer a part of its undertaking;

(b)
make provision for the WSRA to direct one or more eligible

licensees to accept the transfer of a part of the relevant undertaker’s

undertaking.

(2)
In this Chapter “an eligible licensee” is a company—

(a)
that has a water supply licence with a retail authorisation or a

sewerage licence with a retail authorisation, or both, and

(b)
that has elected to be an eligible licensee for the purposes of this

Chapter.

(3)
Exit regulations may—

(a)
provide for an eligible licensee to be specified in an exit application

only if the licensee agrees to be so specified;

(b)
provide for the WSRA to give notice before giving a direction under

subsection (1)(b);

(c)
provide for an eligible licensee to temporarily suspend an election

under subsection (2)(b) so that it may not be given a direction under

subsection (1)(b).

(4)
Exit regulations may make provision about electing to be an eligible

licensee, and may in particular—

(a)
provide for a company to satisfy such criteria as are set out in a code

published by the WSRA before the company may elect to be an

eligible licensee;

(b)
provide for the WSRA to assess whether a company satisfies those

criteria;

(c)
provide for the WSRA to publish a code setting out—

(i)
the criteria mentioned in paragraph (a), and

(ii)
how it conducts such assessments, and

(d)
provide for the WSRA to comply with the code in making such

assessments.

(5)
Exit regulations may—

(a)
allow an eligible licensee, to which a transfer of a part of a relevant

undertaker’s undertaking is proposed to be made, to be a company

associated with the undertaker,

(b)
require the eligible licensee to which such a transfer is made to be

such a company, or

9

(c)
prohibit such a transfer being made to such a company.

(6)
For the purposes of this section, a relevant undertaker is associated with an

eligible licensee if one of them is a subsidiary of the other or both are

subsidiaries of the same body corporate.”
56
Insert the following new Clause—

“Transfer of undertaking

(1)
Exit regulations about the transfer of a part of a relevant undertaker’s

undertaking may include provision for the making of a scheme to transfer

property, rights and liabilities where an exit application has been granted.

(2)
Exit regulations about the transfer of a part of a relevant undertaker’s

undertaking may include provision about arrangements under Chapter 1

of Part 5 of the Water Industry Act 1991 for fixing, demanding and

recovering charges.

(3)
Provision under subsection (2) may include—

(a)
provision for and in connection with treating such arrangements as

if they were agreements between the undertaker and the person

liable to pay such charges;

(b)
provision about the terms and conditions of such agreements.

(4)
Exit regulations may make provision for a scheme under subsection (1) to

contain—

(a)
provision identifying the property, rights and liabilities to be

transferred (which may include property, rights and liabilities that

would not otherwise be capable of being transferred);

(b)
provision for the division of property, rights and liabilities,

including—

(i)
provision creating an interest in or right over property;

(ii)
provision creating new rights and liabilities;

(iii)
incidental provision as to the property, rights and liabilities

of other persons;

(c)
provision about the consideration to be provided (and about the

enforcement of such provision).

(5)
Subsection (4) is not exhaustive of what a scheme may contain.”
57
Insert the following new Clause—

“Operation of retail market

(1)
Exit regulations about the operation of the water industry in relation to a

retail exit area may include such provision as is described in the following

subsections.

(2)
Exit regulations may make provision for and in connection with requiring

a relevant undertaker to impose on an eligible licensee only such charges

under a section 66D agreement or a section 117E agreement as would

enable the licensee to fulfil its obligations under agreements (including

deemed agreements) transferred to the licensee from the undertaker under

the regulations.

10

(3)
Exit regulations may make provision for and in connection with requiring

a water supply or sewerage licensee, where the licensee is providing

services under the licensee’s licence in relation to a retail exit area, to

provide such services under that licence in relation to that area as the

regulations may specify.

(4)
Exit regulations may make provision for and in connection with such

arrangements between a water supply or sewerage licensee and a relevant

undertaker as would enable the licensee to comply with requirements

imposed on it under subsection (3).

(5)
Exit regulations may make provision as to the functions of a relevant

undertaker in relation to a retail exit area and may, in particular, modify or

disapply a duty imposed on a relevant undertaker by—

(a)
section 63AC(2) (interim duty to supply water), or

(b)
section 110L(2) (interim duty to provide sewerage services).

(6)
Exit regulations may provide for a water supply or sewerage licensee

that—

(a)
is a company,

(b)
is providing services under its licence in relation to a retail exit area,

and

(c)
satisfies such criteria as may be specified by the regulations (which

may include criteria as to market share),


to be subject to provision for special administration (see section 23 of, and

Schedule 2 to, the Water Industry Act 1991) in such circumstances as the

regulations may specify.

(7)
Exit regulations may include provision—

(a)
requiring relevant undertakers, water supply licensees and

sewerage licensees to provide such information as the regulations

may specify to customers;

(b)
requiring relevant undertakers, water supply licensees and

sewerage licensees to provide such information as the regulations

may specify to the WSRA or the Secretary of State;

(c)
requiring the WSRA to record such information as the regulations

may specify in the register it maintains under section 195 of the

Water Industry Act 1991.

(8)
Provision under subsection (7)(b) may in particular specify information

about customers and the arrangements under which they receive services.”
58
Insert the following new Clause—

“Operation of retail market: charges etc

(1)
Exit regulations may make provision for water supply licensees and

sewerage licensees, that are providing or proposing to provide services

under their water supply or sewerage licences in relation to a retail exit

area, to 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 such services.

(2)
Provision under subsection (1) may include—

(a)
provision for a scheme to make different provision for different

purposes, or different areas;

11

(b)
provision about the publication of a scheme or revised scheme;

(c)
provision about sending a copy of a scheme or revised scheme to

the WSRA;

(d)
provision enabling the WSRA to direct that terms or conditions be

modified generally or in a particular case;

(e)
provision requiring a licensee to comply with a direction under

paragraph (d), including provision for enforcing such a duty under

section 18 of the Water Industry Act 1991.

(3)
Provision under subsection (1) may also include—

(a)
provision requiring the WSRA to issue a code about providing

services to which a scheme under subsection (1) relates;

(b)
provision for the code to include, in particular, provision about—

(i)
the terms and conditions contained in such schemes;

(ii)
licensees informing owners or occupiers of premises about

their schemes before agreeing any terms and conditions for

the provision of services;

(c)
provision for the WSRA, if it considers that a licensee is not acting

as required by such provision as is described in paragraph (b), to

give the licensee a direction to do, or not to do, a particular thing

specified in the direction;

(d)
provision requiring a licensee to comply with a direction under

paragraph (c), including provision for enforcing such a duty under

section 18 of the Water Industry Act 1991;

(e)
provision requiring the WSRA from time to time to review the code

and, if appropriate, to issue a revised code.

(4)
Exit regulations may make provision for the WSRA to issue and enforce—

(a)
rules about charges for services that may be imposed by water

supply or sewerage licensees in relation to a retail exit area;

(b)
if exit regulations make provision for licensees to make schemes

about such charges, rules about such schemes.

(5)
Provision under subsection (4) may include—

(a)
provision for the rules to make different provision for different

cases;

(b)
provision for the WSRA to direct a licensee to comply with the

rules;

(c)
provision for such directions to be enforceable by the WSRA under

section 18;

(d)
provision for the Secretary of State to issue guidance as to the

content of the rules;

(e)
provision for the Secretary of State to prevent rules being issued.”
59
Insert the following new Clause—

“Exit applications: further provision

(1)
Exit regulations may make provision about the provision relating to exit

applications that may be included in a relevant undertaker’s conditions of

appointment.

(2)
Exit regulations may in particular prohibit the inclusion of provision

requiring a relevant undertaker to make an exit application.