Corporation Taxes Act 2010 (control of a company) apply for the purposes
of paragraph 8 as they apply for the purposes of Part 10 of that Act.”

Section 4

SCHEDULE 4 Sewerage undertakers’ duties as regards sewerage licensees

5After Chapter 2 of Part 4 of the Water Industry Act 1991 there is inserted—

“Chapter 2A

Duties relating to sewerage services: sewerage licensees

Duties of sewerage undertakers as regards enabling the provision of sewerage
services

117A Use of undertaker’s sewerage system

(1) 10This section applies where a sewerage licensee with a retail
authorisation (“L”) requests a sewerage undertaker to permit the use
of the undertaker’s sewerage system for the purpose of enabling L to
provide sewerage services in respect of premises that—

(a) L is to serve in accordance with L’s retail authorisation, and

(b) 15are in the area of the sewerage undertaker.

(2) Where this section applies, the undertaker must in accordance with
a section 117E agreement take such steps—

(a) for the purpose of connecting the drains or sewers of the
premises in question to the undertaker’s sewerage system, or

(b) 20in respect of that system,

as may be provided for in that agreement in order to enable the
requested use of that system.

(3) A sewerage undertaker is not required by this section to permit the
use of its sewerage system, or to take any steps to enable its use, if the
25sewerage licensee making a request has not secured by means of—

(a) a request under section 117B made by the licensee, or

(b) a request under section 117C made by the licensee or another
sewerage licensee,

that there is to be provision for dealing with or removing matter from
30the sewerage system in quantities determined by reference to the
extent of sewerage services provided in respect of the premises in
question.

(4) Where—

(a) a request has been made by a sewerage licensee for the
35purposes of subsection (1), and

(b) the steps which the undertaker is required to take by virtue
of that request include steps for the purpose of obtaining any
necessary authority for, or agreement to, any exercise by it of
any of its powers or the carrying out by it of any works,

the failure of the undertaker to acquire the necessary authority or
agreement does not affect the liability of the licensee to reimburse the
undertaker in respect of some or all of the expenses incurred by it in
taking those steps, if the section 117E agreement provides for such
5liability as regards those steps.

(5) For the purposes of this section and sections 117B and 117C—

(a) premises which are outside a sewerage undertaker’s area are
to be treated as being within that area if they are provided
with sewerage services using the undertaker’s sewerage
10system, and

(b) any sewers or drains of the sewerage undertaker which are
used for the purpose of serving premises as mentioned in
paragraph (a) are to be treated as being part of the
undertaker’s sewerage system (if they would not otherwise
15be part of it).

(6) In this section and sections 117B to 117D—

(a) references to the sewerage system of a sewerage undertaker
are to be construed in accordance with section 17BA(7);

(b) references to the retail authorisation of a sewerage licensee
20are to be construed in accordance with Schedule 2B.

117B Matter dealt with by sewerage undertaker

(1) This section applies where a sewerage licensee with a retail
authorisation (“L”) requests a sewerage undertaker to deal
effectually with certain quantities of matter in its sewerage system in
25circumstances where—

(a) sewerage services are to be provided in accordance with L’s
retail authorisation in respect of particular premises in the
area of the undertaker, and

(b) the quantities to be dealt with are to be determined by
30reference to the extent of sewerage services provided in
respect of those premises.

(2) Where this section applies, the sewerage undertaker must in
accordance with a section 117E agreement—

(a) take such steps in respect of the undertaker’s sewerage
35system as may be provided for in that agreement in order to
enable the use of that system for the purpose in subsection
(1), and

(b) having taken those steps, deal with matter as requested.

(3) Where—

(a) 40a request has been made by a sewerage licensee for the
purposes of subsection (1), and

(b) the steps which the undertaker is required to take by virtue
of that request include steps for the purpose of obtaining any
necessary authority for, or agreement to, any exercise by it of
45any of its powers or the carrying out by it of any works,

the failure of the undertaker to acquire the necessary authority or
agreement does not affect the liability of the licensee to reimburse the
undertaker in respect of some or all of the expenses incurred by it in

taking those steps, if the section 117E agreement provides for such
liability as regards those steps.

117C Removal of matter from sewerage system by a sewerage licensee

(1) This section applies where a sewerage licensee with a wholesale
5authorisation (“L”) requests a sewerage undertaker to permit L to
remove certain quantities of matter from the undertaker’s sewerage
system in circumstances where—

(a) sewerage services are to be provided in accordance with a
retail authorisation (whether L’s or another’s) in respect of
10particular premises in the area of the undertaker, and

(b) the quantities to be removed are to be determined by
reference to the extent of sewerage services provided in
respect of those premises.

(2) Where this section applies, the sewerage undertaker must in
15accordance with a section 117E agreement—

(a) take such steps, including steps in respect of the undertaker’s
sewerage system, as may be provided for in that agreement
in order to enable L to remove matter from the undertaker’s
sewerage system as requested, and

(b) 20having taken those steps, permit that requested removal of
matter from that sewerage system.

(3) Where—

(a) a request has been made by a sewerage licensee for the
purposes of subsection (1), and

(b) 25the steps which the undertaker is required to take by virtue
of that request include steps for the purpose of obtaining any
necessary authority for, or agreement to, any exercise by it of
any of its powers or the carrying out by it of any works,

the failure of the undertaker to acquire the necessary authority or
30agreement does not affect the liability of the licensee to reimburse the
undertaker in respect of some or all of the expenses incurred by it in
taking those steps, if the section 117E agreement provides for such
liability as regards those steps.

(4) A pipe connecting a sewerage undertaker’s sewerage system to a
35sewage disposal works that is laid because of subsection (2)(a) is to
be regarded as a disposal main for the purposes of this Act, subject
to any provision to the contrary.

(5) In this section, a reference to a wholesale authorisation is to be
construed in accordance with Schedule 2B.

117D 40Connections for the purposes of a disposal authorisation

(1) This section applies where a sewerage licensee with a disposal
authorisation (“L”) requests a sewerage undertaker to permit L to
remove matter from the undertaker’s sewerage system.

(2) Where this section applies, the sewerage undertaker must in
45accordance with a section 117E agreement—

(a) take such steps, including steps in respect of the undertaker’s
sewerage system, as may be provided for in that agreement

in order to enable L to remove matter from the undertaker’s
sewerage system as requested, and

(b) having taken those steps, permit that requested removal of
matter from that sewerage system.

(3) 5Where—

(a) a request has been made by a sewerage licensee for the
purposes of subsection (1), and

(b) the steps which the undertaker is required to take by virtue
of that request include steps for the purpose of obtaining any
10necessary authority for, or agreement to, any exercise by it of
any of its powers or the carrying out by it of any works,

the failure of the undertaker to acquire the necessary authority or
agreement does not affect the liability of the licensee to reimburse the
undertaker in respect of some or all of the expenses incurred by it in
15taking those steps, if the section 117E agreement provides for such
liability as regards those steps.

(4) A pipe connecting a sewerage undertaker’s sewerage system to a
sewage disposal works that is laid because of subsection (2)(a) is to
be regarded as a disposal main for the purposes of this Act, subject
20to any provision to the contrary.

(5) In this section, a reference to a disposal authorisation is to be
construed in accordance with Schedule 2B.

117E Agreements as to duties under sections 117A to 117D

(1) On the application of—

(a) 25a sewerage licensee that has made a request under sections
117A to 117D, or

(b) a sewerage undertaker to which such a request has been
made,

the Authority may by order require a sewerage undertaker to
30perform the duty in question under sections 117A to 117D, for such
period and on such terms and conditions as may be specified in the
order.

(2) The Authority may make an order under subsection (1) only if—

(a) it appears to the Authority that the sewerage undertaker is
35required to perform the duty in question, and

(b) it is satisfied that the parties cannot reach agreement within a
reasonable time.

(3) An order under subsection (1) has effect as an agreement between—

(a) the sewerage licensee, and

(b) 40the sewerage undertaker required to perform the duty in
question.

(4) On the application of a party to a section 117E agreement, the
Authority may, if it is satisfied that the parties cannot reach
agreement on the variation or termination of the agreement, by order
45vary or terminate the agreement.

(5) If an order under subsection (4) is made in relation to a section 117E
agreement, the agreement—

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

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

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

(7) 5Neither the CMA nor the Authority may exercise, in respect of an
agreement for the performance of a duty under sections 117A to
117D by a sewerage undertaker, the powers conferred by—

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

(b) 10section 35(2) of that Act (interim directions).

(8) Subsection (7)(b) does not apply to the exercise of powers in respect
of conduct—

(a) which is connected with an agreement for the performance of
a duty under sections 117A to 117D by a sewerage
15undertaker, 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 relating to a suspected infringement of the Chapter 2
prohibition imposed by section 18(1) of that Act.

(9) 20In this Chapter a reference to a section 117E agreement is a reference
to—

(a) an agreement for the performance of a duty under sections
117A to 117D by a sewerage undertaker, or

(b) an order deemed to be such an agreement under subsection
25(3), or

(c) an agreement varied by order under subsection (4).

117F Codes in respect of section 117E agreements

(1) The Authority may issue one or more codes in respect of section 117E
agreements.

(2) 30A code may make provision about—

(a) procedures in connection with making a section 117E
agreement;

(b) procedures in connection with varying or terminating a
section 117E agreement;

(c) 35the terms and conditions of a section 117E agreement,
including terms as to the duration of such an agreement;

(d) principles for determining the terms and conditions that
should or should not be incorporated into a section 117E
agreement.

(3) 40A code may make provision about the steps to be taken by the
Authority in determining for the purposes of section 117E(2)
whether a sewerage undertaker is, in the particular case, required to
perform a duty under sections 117A to 117D.

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

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

(6) It is the duty of a sewerage undertaker or a sewerage licensee to
comply with a direction under subsection (4), and this duty is
5enforceable by the Authority under section 18.

(7) A code may make—

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

(b) different provision for different duties under sections 117A to
10117D.

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

(9) A revised code may include provision for applying any of its
revisions to section 117E agreements made before the revised code
15comes into effect.

117G Codes under section 117F: procedure

(1) Before issuing a code under section 117F, the Authority must—

(a) prepare a draft of the proposed code under section 117F, and

(b) consult persons in accordance with subsections (2) and (3).

(2) 20The relevant persons are—

(a) the Secretary of State;

(b) the appropriate agency;

(c) the Council;

(d) any sewerage undertakers likely to be affected by the
25proposed code;

(e) any sewerage licensees likely to be affected by the proposed
code;

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

(3) The Authority must specify the period (“the consultation period”)
30within which a person may make representations about the
proposed code.

(4) Before a code under section 117F prepared by the Authority is issued
for the first time, the Secretary of State may direct the Authority—

(a) not to issue the code, or

(b) 35to issue the code with specified modifications.

(5) A 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 a code in relation to which a direction may be given may
not be issued before that period of 28 days has expired.

(6) 40In this section “the appropriate agency” means—

(a) the Environment Agency, in relation to section 117E
agreements made with sewerage undertakers whose areas
are wholly in England;

(b) both the Environment Agency and the NRBW, in relation to
section 117E agreements made with sewerage undertakers
whose areas are partly in England and partly in Wales.

(7) This section is subject to section 117H.

117H 5Codes under section 117F: minor or urgent revisions

(1) This section applies if the Authority proposes to issue a revised code
under section 117F 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) 10a revision that it is necessary or desirable to make without
delay.

(2) Section 117G does not apply to the proposed revised code.

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

(a) 15the issuing of the revised code, and

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

(4) Notice under subsection (3) is to be given to such persons as the
20Authority considers appropriate.

(5) Unless the Authority gives notice that a revision in a revised code is
in the view of the Authority a revision falling within subsection
(1)(a), the revision ceases to have effect at the end of the period of six
months beginning with the day after that on which the revised code
25is issued.

117I Rules about charges

(1) The Authority must issue rules about charges that may be imposed
by sewerage undertakers under a section 117E agreement.

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

(a) 30the types of charges that may be imposed;

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

(c) principles for determining what types of charges may or may
35not be imposed;

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

(e) publication of the charges that may be imposed.

(3) The rules must include provision for and in connection with
40requiring a sewerage undertaker to impose on a sewerage licensee
only such charges as would enable the licensee, where the services it
provides to a person under its retail authorisation are services to
which a section 142(2)(b) agreement would apply if the undertaker
had continued to provide the services, to charge for those services at
45the same rate or rates as would have applied if the section 142(2)(b)
agreement had applied.

(4) In subsection (3) “section 142(2)(b) agreement” means an agreement
to which section 142(2)(b) applies.

(5) If the Authority considers that a sewerage undertaker is not acting as
required by rules under this section, the Authority may—

(a) 5give the undertaker a direction to do, or not to do, a thing
specified in the direction, or

(b) in a case where a section 117E agreement to which the
undertaker is party requires modification in order to conform
to the rules, give a direction to the undertaker and the
10sewerage licensee in question to modify the agreement.

(6) It is the duty of a sewerage undertaker or a sewerage licensee to
comply with a direction under subsection (5), and this duty is
enforceable by the Authority under section 18.

(7) The rules may—

(a) 15make different provision for different persons or descriptions
of person;

(b) make different provision for different purposes;

(c) make provision subject to exceptions.

(8) The Authority may from time to time revise rules issued under this
20section and issue revised rules.

(9) The Authority must issue revised rules if—

(a) guidance is issued under section 117M, and

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

(10) 25Revised rules may include provision for applying any of the
revisions to section 117E agreements made before the revised rules
come into effect.

117J Rules about charges: provision about the reduction of charges

(1) Rules under section 117I may provide for the reduction of charges
30payable under a section 117E agreement where—

(a) a sewerage licensee that has a retail authorisation is party to
the section 117E agreement, and

(b) other conditions specified by the rules are satisfied.

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

(a) 35specify conditions relating to any party to the section 117E
agreement;

(b) specify conditions about persons taking steps for the purpose
of reducing or managing demand for sewerage services;

(c) specify conditions about the premises by reference to which
40such steps are to be taken;

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

(i) is not party to the section 117E agreement, and

(ii) takes or proposes to take such steps as satisfy or
45would satisfy a condition specified under 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
undertaker to which the charges are payable must give notice of that
reduction to the Authority.

(4) 5Rules 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 to the Authority.

(5) Provision under subsection (4)(a) may in particular require the notice
10to specify—

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

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

117K Rules under section 117I: procedure

(1) Before issuing rules under section 117I, the Authority must—

(a) 15prepare a draft of the proposed rules, and

(b) consult the relevant persons about the draft.

(2) The relevant persons are—

(a) the Secretary of State;

(b) the appropriate agency;

(c) 20the Council;

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

(e) any sewerage licensees likely to be affected by the proposed
rules;

(f) 25such other persons as the Authority thinks appropriate.

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

(4) The Authority must have regard to guidance issued under section
30117M in making rules under section 117I.

(5) Before rules under section 117I prepared by the Authority are issued,
the Secretary of State may direct the Authority not to issue the rules.

(6) A direction under subsection (5) must be given within the period of
28 days beginning with the day after the end of the consultation
35period, and rules may not be issued before that period of 28 days has
expired.

(7) In this section “the appropriate agency” means—

(a) the Environment Agency, in relation to section 117E
agreements made with sewerage undertakers whose areas
40are wholly in England;

(b) both the Environment Agency and the NRBW, in relation to
section 117E agreements made with sewerage undertakers
whose areas are partly in England and partly in Wales.

(8) This section is subject to section 117L.

117L Rules under section 117I: minor or urgent revisions

(1) This section applies if the Authority proposes to issue revised rules
under section 117I and, in the view of the Authority, the revision or
each of the revisions proposed to be made is—

(a) 5a revision for which consultation is unnecessary, or

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

(2) Section 117K does not apply to the proposed revised rules.

(3) Before issuing the revised rules, the Authority must give notice to the
10Secretary of State of its intention to issue revised rules.

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

(5) A direction under subsection (4) must be given within the period of
14 days beginning with the day after the day on which notice is given
15under subsection (3), and the Authority may not issue the revised
rules in question before—

(a) that period of 14 days expires, or

(b) the Secretary of State notifies the Authority that no direction
under subsection (4) will be given in relation to the revised
20rules,

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) 25as 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) 30Unless 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.

117M 35Rules under section 117I: guidance

(1) The Minister may issue guidance as to the content of rules under
section 117I.

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

(a) prepare a draft of the proposed guidance;

(b) 40consult the relevant persons about the draft.

(3) The relevant persons are such persons as the Minister thinks
appropriate.

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