8 In section 12 (determinations under conditions of appointment), in
subsection (3B) (application of certain provisions to references to
competition authority under section 12) for “sections 16A and 16B” there is
substituted “sections 14A and 14B”.

9 5For the heading of Chapter 1A of Part 2 there is substituted—

“Water supply licences and sewerage licences”.

10 (1) Section 17B (provision supplementary to section 17A) is amended as
follows.

(2) For the title there is substituted “Meaning of supply system”.

(3) Subsections (1) to (4) (provision as to guidance on extent of premises) are
10repealed.

(4) Subsection (9) (references to a licensed water supplier) is repealed.

11 In section 17C (meaning of “household premises”), in subsection (1) for
“section 17A(3)(a) above” there is substituted “paragraphs 4 and 7(a) of
Schedule 2A and paragraph 2 of Schedule 2B”.

12 (1) 15Section 17D (the threshold requirement) is amended as follows.

(2) In subsection (1) (purpose of section 17D)—

(a) for “section 17A(3)(b) above” there is substituted “paragraph 7(b) of
Schedule 2A”;

(b) after “the supply of water to any premises” there is inserted “in
20accordance with a restricted retail authorisation”.

(3) In subsection (2) (description of the requirement), for “licensed water
supplier” there is substituted “water supply licensee”.

(4) In subsection (3) (guidance on making estimate)—

(a) after “guidance issued” there is inserted “from time to time”;

(b) 25for “the Secretary of State” there is substituted “the Welsh Ministers”.

(5) Subsection (5) (duty of Secretary of State to consult the National Assembly
for Wales before issuing guidance) is repealed.

(6) Subsection (6) (application of guidance provision to threshold requirement)
is repealed.

(7) 30In subsection (7) (regulations as to entering into an undertaking to supply
water)—

(a) for “The Secretary of State” there is substituted “The Welsh
Ministers”;

(b) for “licensed water supplier” there is substituted “water supply
35licensee”;

(c) the words “(subject to subsection (12) below)” are repealed.

(8) In subsection (8) (regulations to alter the threshold)—

(a) for “The Secretary of State” there is substituted “The Welsh
Ministers”;

(b) 40the words “(subject to subsection (12) below)” are repealed.

(9) In subsection (10) (procedure), for “each House of Parliament” there is
substituted “the Assembly”.

(10) In subsection (11) (consultation before making regulations)—

(a) for “the Secretary of State”, in the first place where those words
occur, there is substituted “the Welsh Ministers”;

(b) for “the Secretary of State thinks” there is substituted “the Welsh
5Ministers think”.

(11) Subsections (12) and (13) (exercise of powers by Welsh Ministers) are
repealed.

13 After section 17D there is inserted—

“17DA Guidance

10The Authority must publish guidance issued from time to time
under—

(a) section 17D(3),

(b) paragraph 10 of Schedule 2A, or

(c) paragraph 4 of Schedule 2B,

15in such manner as the Authority considers appropriate for the
purpose of bringing it to the attention of persons likely to be affected
by it.”

14 (1) Section 17E (determinations by the Authority) is amended as follows.

(2) For subsection (1) there is substituted—

“(1) 20The Authority may determine, in a case referred to it by—

(a) a water supply licensee or a potential customer of a water
supply licensee, or

(b) a sewerage licensee or a potential customer of a sewerage
licensee,

25whether a proposed supply of water to, or proposed sewerage
services for, the customer would be in accordance with what is
authorised by the licensee’s licence.”

(3) In subsection (2)—

(a) in paragraph (a), for “section 17A(3) above” there is substituted
30“paragraph 4 or 7(a) or (b) of Schedule 2A”;

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

“(aa) the extent of the premises to be served for the
purposes of paragraph 2 of Schedule 2B;”;

(c) in paragraph (b), after “to be supplied” there is inserted “or served”.

15 (1) 35Section 17F (procedure for granting water supply licences) is amended as
follows.

(2) In the title, after “water supply” there is inserted “and sewerage”.

(3) In subsection (4)—

(a) the words “the Secretary of State or” are repealed;

(b) 40the words “he or”, in each place they occur, are repealed.

(4) In subsection (7)—

(a) the words “the Secretary of State or” are repealed;

(b) for paragraph (g) there is substituted—

“(g) on each water supply licensee and sewerage licensee
(other than the holder of the licence in question);”;

(c) paragraph (h) is repealed;

(d) 5in paragraph (i), the words “if the licence or variation is granted by
the Authority,” are repealed.

(5) In subsection (8), the words “by the Secretary of State or” are repealed.

16 (1) Section 17G (water supply licence conditions) is amended as follows.

(2) For the title there is substituted “Licence conditions”.

(3) 10In subsection (1) (conditions to be included)—

(a) for “A water supply licence” there is substituted “A licence under
this Chapter”;

(b) in paragraph (a), the words “the Secretary of State or, as the case may
be,” are repealed;

(c) 15in paragraph (a), the words “him or” are repealed;

(d) in paragraph (b), for “the Secretary of State” there is substituted “the
Authority”;

(e) in paragraph (b), for “water supply licence” there is substituted
“licence under this Chapter”.

(4) 20After subsection (2) there is inserted—

“(2A) Conditions may be included by virtue of subsection (1)(a) in a
sewerage licence whether or not they are connected with—

(a) effectual dealing with the contents of sewers, or

(b) the use of the sewerage system of a sewerage undertaker.”

(5) 25In subsection (3) (directions and determinations), for “water supply licence”
there is substituted “licence under this Chapter”.

(6) In subsection (4) (persons who may give directions etc), in paragraph (a)(iii),
at the beginning there is inserted “so far as subsection (3) applies to water
supply licences,”.

(7) 30In subsection (5) (duration and modification of conditions), for “water
supply licence” there is substituted “licence under this Chapter”.

(8) In subsection (7) (payments received by Secretary of State paid into the
Consolidated Fund), for “the Secretary of State” there is substituted “the
Authority”.

17 (1) 35Section 17H (standard conditions of water supply licences) is amended as
follows.

(2) For subsections (1) to (3) there is substituted—

“(1) The Secretary of State may determine the conditions that are to be the
standard conditions of water supply licences granted by the
40Authority.

(1A) Before determining the standard conditions, the Secretary of State
must consult the Welsh Ministers as regards conditions relating to a
restricted retail authorisation or a supplementary authorisation.

(1B) The Secretary of State is to publish the standard conditions in such
manner as the Secretary of State considers appropriate.

(2) The standard conditions may be different depending on the different
authorisations or combinations of authorisations to which the
5conditions are to relate.

(3) The power to determine standard conditions in relation to water
supply licences giving a particular authorisation or a particular
combination of authorisations may be exercised only before the
grant of the first licence to give that authorisation or that particular
10combination of authorisations (but this is without prejudice to the
power to modify standard conditions in accordance with the
provisions of this Chapter).”

(3) In subsection (4) (general provision about standard conditions), for “of
either description” there is substituted “giving any particular authorisation
15or combination of authorisations”.

(4) In subsection (6) (power to exclude or modify standard conditions in a
particular case)—

(a) the words “the Secretary of State or” are repealed;

(b) the words “he or” are repealed.

(5) 20In subsection (7) (steps before exercising power in subsection (6))—

(a) the words “the Secretary of State or” are repealed;

(b) in paragraph (a), the words “he or” are repealed;

(c) in paragraph (b), the words “he or” are repealed.

(6) In subsection (8) (publication of notice of intention to modify standard
25conditions)—

(a) in paragraph (a), the words “the Secretary of State or (as the case may
be)” are repealed;

(b) for paragraph (b)(i) there is substituted—

“(i) if the notice relates to a water supply licence
30giving a restricted retail authorisation or a
restricted retail authorisation and a
supplementary authorisation, on the Welsh
Ministers;”;

(c) paragraph (b)(iii) is repealed;

(d) 35in paragraph (b)(iv), the words “if the notice is published by the
Authority,” are repealed;

(e) after paragraph (b)(iv) there is inserted—

“(v) on the Water Industry Commission for
Scotland.”

(7) 40In subsection (9) (direction not to exclude or modify a standard condition),
for “the Assembly” there is substituted “the Welsh Ministers in a case where
notice was served on them under subsection (8)(b)(i)”.

(8) In subsection (10) (power under subsection (6) not to be exercised in certain
circumstances)—

(a) 45the words “Secretary of State or the” are repealed;

(b) the words “he or” are repealed.

18 After section 17H there is inserted—

“17HA Standard conditions of sewerage licences

(1) The Secretary of State may determine the conditions that are to be the
standard conditions of sewerage licences granted by the Authority.

(2) 5The Secretary of State is to publish the standard conditions in such
manner as the Secretary of State considers appropriate.

(3) The standard conditions may be different depending on the different
authorisations or combinations of authorisations to which the
conditions are to relate.

(4) 10The power to determine standard conditions in relation to sewerage
licences giving a particular authorisation or a particular combination
of authorisations may be exercised only before the grant of the first
licence to give that authorisation or that particular combination of
authorisations (but this is without prejudice to the power to modify
15standard conditions in accordance with the provisions of this
Chapter).

(5) The standard conditions for the purposes of sewerage licences giving
any particular authorisation or combination of authorisations may
contain provision—

(a) 20for any standard condition included in a licence of that
description not to have effect until brought into operation in
such manner and in such circumstances as may be specified
in or determined under the standard conditions;

(b) for the effect of any standard condition included in such a
25licence to be suspended in such manner, and in such
circumstances, as may be so specified or determined; and

(c) for any standard condition included in such a licence which
is for the time being suspended to be brought back into
operation in such manner and in such circumstances as may
30be so specified or determined.

(6) Subject to subsection (7), each condition which is a standard
condition is to be incorporated by reference in each sewerage licence
(or in each such licence to which the standard condition applies).

(7) Subject to the following provisions of this section, the Authority
35may, in granting a licence, exclude or modify any of the standard
conditions to such extent as the Authority considers requisite to meet
the circumstances of a particular case.

(8) Before excluding any standard conditions or making any
modifications under subsection (7), the Authority must give notice—

(a) 40stating that the Authority proposes to exclude the conditions
or make the modifications and setting out the effect of so
doing;

(b) stating the reasons why the Authority proposes to exclude
the conditions or make the modifications; and

(c) 45specifying the time (not being less than 28 days from the date
of publication of the notice) within which representations or
objections with respect to the proposed exclusions or
modifications may be made,

and the Authority must consider any representations or objections
which are duly made and not withdrawn.

(9) A notice under subsection (8) must be given—

(a) by publishing the notice in such manner as the Authority
5considers appropriate for the purpose of bringing the notice
to the attention of persons likely to be affected by the making
of the exclusions or modifications; and

(b) by serving a copy of the notice—

(i) on the Secretary of State;

(ii) 10on the Environment Agency;

(iii) on the NRBW;

(iv) on the Water Industry Commission for Scotland.

(10) If, within the time specified in the notice under subsection (8), the
Secretary of State directs the Authority not to exclude or modify any
15standard condition, the Authority must comply with the direction.

(11) The Authority may not exclude any conditions, or make any
modifications, under subsection (7) unless the Authority is of the
opinion that the exclusions or modifications are such that—

(a) the licence holder would not be unduly disadvantaged in
20competing with other holders of sewerage licences; and

(b) no other holder of a sewerage licence would be unduly
disadvantaged in competing with other holders of such
licences (including the holder of the licence being granted).

(12) The modification under subsection (7) of part of a standard condition
25is not to prevent any other part of the condition from continuing to
be treated as a standard condition for the purposes of this Chapter.”

19 (1) Section 17I (modification of licences by agreement) is amended as follows.

(2) For the title there is substituted “Modification of licences by agreement”.

(3) In subsection (1) (power of Authority to modify licence), for the words from
30“conditions of” to the end there is substituted “conditions of—

“(a) a particular water supply licence, or

(b) a particular sewerage licence.”

(4) In subsection (2)(b) (modification not to cause undue disadvantage)—

(a) in sub-paragraph (i), after “water supply licences” there is inserted
35“or, as the case may be, sewerage licences”;

(b) in sub-paragraph (ii), after “a water supply licence” there is inserted
“or, as the case may be, a sewerage licence”.

(5) In subsection (4)(b) (persons to be served with notice of proposed
modifications), in sub-paragraph (iv), at the beginning there is inserted “if
40the notice relates to a water supply licence,”.

(6) In subsection (5) (direction not to modify a condition), the words “(after
consulting the Assembly)” are repealed.

(7) After subsection (5) there is inserted—

“(5A) The Secretary of State is to consult the Welsh Ministers before giving
45a direction under subsection (5) in relation to a water supply licence.”

20 (1) Section 17J (general modification of standard conditions) is amended as
follows.

(2) For the title there is substituted “Modification of standard conditions”.

(3) In subsection (1) (power of Authority to modify standard conditions), for the
5words from “may modify” to the end there is substituted “may modify—

“(a) the standard conditions of water supply licences, or

(b) the standard conditions of sewerage licences.”

(4) After subsection (1) there is inserted—

“(1A) Modifications may relate to—

(a) 10standard conditions contained in all water supply licences or
sewerage licences, or

(b) standard conditions contained in those water supply licences
or sewerage licences that grant a particular authorisation or
combination of authorisations.”

(5) 15In subsection (2) (power to make incidental and consequential
modifications)—

(a) for “retail licences or combined licences” there is substituted “water
supply licences or sewerage licences”;

(b) for “any licence of that description” there is substituted “any licence
20so affected”.

(6) In subsection (4)(b) (persons to be served with notice of proposed
modifications), in sub-paragraph (iv), at the beginning there is inserted “if
the notice relates to a water supply licence,”.

(7) In subsection (5) (direction not to modify a standard condition), the words
25“(after consulting the Assembly)” are repealed.

(8) After subsection (5) there is inserted—

“(5A) The Secretary of State is to consult the Welsh Ministers before giving
a direction under subsection (5) in relation to a water supply licence.”

(9) In subsection (6) (modification conditional on views of relevant licence
30holders), for “retail licences or combined licences” there is substituted
“water supply licences or sewerage licences”.

(10) In subsection (8) (preconditions for modification of standard condition), in
paragraph (c) after “a water supply licence” there is inserted “or, as the case
may be, a sewerage licence”.

(11) 35In subsection (10) (consultation with Welsh Ministers), after “subsection (6)
above” there is inserted “in relation to the standard conditions of water
supply licences”.

(12) In subsection (12) (changed standard conditions to be used in new
licences)—

(a) 40for “retail licences or combined licences” there is substituted “water
supply licences or sewerage licences”;

(b) in paragraph (a), for “licences of that description” there is substituted
“water supply licences or, as the case may be, sewerage licences”;

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

“Where the Authority modifies the standard conditions of
water supply licences or sewerage licences that grant
particular authorisations or combinations of authorisations,
5paragraph (a) has effect only as regards licences granting the
same authorisations or combinations of authorisations.”

(13) In subsection (13) (meaning of “relevant licence holder”), for “retail licences
or combined licences” there is substituted “water supply licences or
sewerage licences or of such of those licences as grant a particular
10authorisation or combination of authorisations”.

21 (1) Section 17K (references to competition authority in relation to the
modification of licences) is amended as follows.

(2) For the title there is substituted “Modification references to competition
authority”.

(3) 15In subsection (1) (reference of a particular licence), in paragraph (a)(i), for “a
particular licence” there is substituted “a particular water supply or
sewerage licence”.

(4) In subsection (2) (general matters that may be referred), in paragraph (a)(i),
for “retail licences or combined licences” there is substituted “water supply
20licences or sewerage licences that grant a particular authorisation or
combination of authorisations”.

(5) In subsection (5)(b) (persons to be served with copy of reference or
variation), in sub-paragraph (iv), at the beginning there is inserted “in a case
relating to a water supply licence or licences,”.

22 (1) 25Section 17N (reports on modification references) is amended as follows.

(2) For the title there is substituted “Reports on modification references”.

(3) In subsection (10)(a) (persons to be served with report relating to a particular
licence), in sub-paragraph (iv), at the beginning there is inserted “if the
report relates to a water supply licence,”.

(4) 30In subsection (11)(a) (persons to be served with report relating to a standard
condition), in sub-paragraph (ii), at the beginning there is inserted “if the
report relates to water supply licences,”.

(5) In subsection (12) (meaning of “relevant time”), in paragraph (a), after
“Secretary of State and” there is inserted “, if the report relates to water
35supply licences,”.

23 (1) Section 17O (modification of licences following report) is amended as
follows.

(2) For the title there is substituted “Modification of licences following report”.

(3) In subsection (2) (power to make incidental and consequential
40modifications), for “the standard conditions of retail licences or combined
licences” there is substituted “—

“(a) the standard conditions of water supply licences or sewerage
licences, or

(b) the standard conditions of water supply licences or sewerage
licences that grant a particular authorisation or combination
of authorisations,”.

(4) In subsection (5)(c)(iii), at the beginning there is inserted “in a case relating
5to a water supply licence or licences,”.

(5) In subsection (10) (changed standard conditions to be used in new
licences)—

(a) for “retail licences or combined licences” there is substituted “water
supply licences or sewerage licences”;

(b) 10in paragraph (a), for “licences of that description” there is substituted
“water supply licences or, as the case may be, sewerage licences”;

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

“Where the Authority modifies the standard conditions of
water supply licences or sewerage licences that grant
15particular authorisations or combinations of authorisations,
paragraph (a) has effect only as regards licences granting the
same authorisations or combinations of authorisations.”

24 (1) Section 17P (competition authority’s power of veto following report) is
amended as follows.

(2) 20For the title there is substituted “Power of veto following report”.

(3) In subsection (7)(b) (persons to be served with notice of modifications
proposed), in sub-paragraph (v), at the beginning there is inserted “if the
reference relates to water supply licences,”.

(4) In subsection (10) (power to make incidental and consequential
25modifications), for “the standard conditions of retail licences or combined
licences” there is substituted “—

“(a) the standard conditions of water supply licences or sewerage
licences, or

(b) the standard conditions of water supply licences or sewerage
30licences that grant a particular authorisation or combination
of authorisations,”.

(5) In subsection (11) (changed standard conditions to be used in new
licences)—

(a) for “retail licences or combined licences” there is substituted “water
35supply licences or sewerage licences”;

(b) in paragraph (a), for “licences of that description” there is substituted
“water supply licences or, as the case may be, sewerage licences”;

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

“Where the Authority modifies the standard conditions of
40water supply licences or sewerage licences that grant
particular authorisations or combinations of authorisations,
paragraph (a) has effect only as regards licences granting the
same authorisations or combinations of authorisations.”

25 (1) Section 17R (modification of licences by order under other enactments) is
45amended as follows.

(2) For the title there is substituted “Modification by order under other
enactments”.

(3) In subsection (1) (power for the competition authorities and the Secretary of
State to modify standard conditions in order to give effect to orders under
the Enterprise Act 2002), for paragraphs (a) and (b) there is substituted—

“(a) the conditions of a particular water supply or sewerage
5licence,

(b) the standard conditions of water supply licences or sewerage
licences, or

(c) the standard conditions of water supply licences or sewerage
licences that grant a particular authorisation or combination
10of authorisations,”.

(4) In subsection (2) (identification of orders under the Enterprise Act 2002)—

(a) in paragraph (a)(i), for “a retail licence or combined licence” there is
substituted “a water supply licence or sewerage licence”;

(b) in paragraph (a)(ii), for “a retail licence or combined licence” there is
15substituted “a water supply licence or sewerage licence”;

(c) in paragraph (b), for “a retail licence or combined licence” there is
substituted “a water supply licence or sewerage licence”.

(5) In subsection (4) (changed standard conditions to be included in new
licences and power to make incidental and consequential modifications of
20existing licences)—

(a) for “subsection (1)(b)” there is substituted “subsection (1)(b) or (c)”;

(b) for “the standard conditions of retail licences or combined licences”
there is substituted “the standard conditions of water supply licences
or sewerage licences or of water supply licences or sewerage licences
25that grant a particular authorisation or combination of
authorisations”.

(6) In subsection (5) (publication of modifications), for “retail licences or
combined licences” there is substituted “water supply licences or sewerage
licences”.

26 (1) 30Section 18 (orders for securing compliance with certain provisions) is
amended as follows.

(2) In subsection (1)—

(a) after “Part or” there is inserted “any person holding”;

(b) in paragraph (a), after “that company” there is inserted “or that
35person”;

(c) in paragraph (a)(i), after “appointment or” there is inserted “the
person’s”;

(d) in paragraph (b), after “that company” there is inserted “or that
person”.

(3) 40In subsection (1A)—

(a) in paragraph (a)(i), for “a company” there is substituted “a person”;

(b) in paragraph (b), for “any company” there is substituted “any
person”;

(c) in that paragraph, for “the company” there is substituted “the
45person”.

(4) In subsection (2), after “Part or” there is inserted “any person holding”.

(5) In subsection (6)(a), after “Part or” there is inserted “a person holding”.