(9) In this section “the Minister” has the meaning given by section 144ZB.

144ZD Rules under section 144ZA: guidance

(1) The Minister must issue guidance as to the content of rules under
section 144ZA.

(2) 5Before issuing the guidance, the Minister must—

(a) prepare a draft of the proposed guidance;

(b) consult the relevant persons about the draft.

(3) The relevant persons are—

(a) the Secretary of State;

(b) 10the Welsh Ministers;

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

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

(5) Subsections (2) and (3) apply to revised guidance as they apply to the
15original guidance.

(6) The Minister must arrange for the publication of guidance issued under
this section.

(7) In this section “the Minister” means—

(a) the Secretary of State, in relation to relevant undertakers whose
20areas are wholly or mainly in England;

(b) the Welsh Ministers, in relation to relevant undertakers whose
areas are wholly or mainly in Wales.”

18 Charges for providing a water main etc

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

(2) 25In section 42 (financial conditions for compliance with the duty in section 41 to
provide a water main)—

(a) in subsection (1)(b) (condition as to providing security), for the words
from “such security” to “reasonably required” there is substituted
“such security as charging rules allow and the undertaker may have
30required”;

(b) in subsection (2) (undertaking to pay), for paragraph (a) there is
substituted—

“(a) bind the person or persons mentioned in that subsection
to pay to the undertaker such charges as the undertaker
35may impose in accordance with charging rules, and”;

(c) subsections (4) and (5) (interest on sums deposited by way of security)
are repealed;

(d) in subsection (6) (reference of disputes to Water Services Regulation
Authority), in paragraph (b), after “the amount” there is inserted “or
40amounts by way of charges”.

(3) In section 45 (duty to make domestic connections to a water main)—

(a) in subsection (2) (the nature of the duty), the words “, at the expense of
the person serving the notice,” are repealed;

(b) for subsection (6) there is substituted—

“(6) Where a water undertaker carries out any works which it is its
duty under this section to carry out, the person serving the
notice is liable to pay to the undertaker such charges as the
5undertaker may impose in accordance with charging rules.”;

(c) in subsection (6A) (reference of disputes to Authority), for “as to
whether the expenses were incurred reasonably” there is substituted
“as to the payments required to be made”.

(4) In section 46 (duty to carry out ancillary works for the purpose of making a
10domestic connection under section 45)—

(a) in subsection (1) (the nature of the duty), the words “, at the expense of
the person serving the notice,” are repealed;

(b) in subsection (7), in paragraph (b), for “under this section at another
person’s expense” there is substituted “as its duty under this section”;

(c) 15in subsection (7), in the words after paragraph (b), for “under that
section at another person’s expense” there is substituted “as its duty
under that section”;

(d) in subsection (9) (consequences of exercising power under section 46(8)
to lay a water main rather than a service pipe), paragraph (b)
20(maximum expenses recoverable) and the “but” preceding it are
repealed.

(5) In section 47 (conditions of connection with water main)—

(a) in subsection (2)(a) (requirement to give security for amounts to be
paid), for the words from “such security” to “reasonably require” there
25is substituted “such security as charging rules allow and the undertaker
requires”;

(b) in subsection (3B) (reference of disputes to Authority), in the opening
words, “whether” is repealed;

(c) in subsection (3B), for paragraph (a) there is substituted—

“(a) 30the security required to be provided by a condition
imposed under subsection (2)(a),”;

(d) in subsection (3B)(b), at the beginning there is inserted “whether”;

(e) in subsection (3B)(c), after “particular case,” there is inserted “whether”.

19 Charges for providing a public sewer etc

(1) 35The Water Industry Act 1991 is amended as follows.

(2) In section 99 (financial conditions for compliance with the duty in section 98 to
provide a public sewer or lateral drain)—

(a) in subsection (1)(b) (condition as to providing security), for the words
from “such security” to “reasonably required” there is substituted
40“such security as charging rules allow and the undertaker may have
required”;

(b) in subsection (2) (undertaking to pay in respect of public sewer), for
paragraph (a) there is substituted—

“(a) bind the person or persons mentioned in that subsection
45to pay to the undertaker such charges as the undertaker
may impose in accordance with charging rules, and”;

(c) in subsection (2A) (undertaking to pay in respect of lateral drain), for

paragraph (a) there is substituted—

“(a) bind the person or persons mentioned in that subsection
to pay to the undertaker such charges as the undertaker
may impose in accordance with charging rules, and”;

(d) 5subsections (4) and (5) (interest on sums deposited by way of security)
are repealed;

(e) in subsection (6) (reference of disputes to the Water Services Regulation
Authority), in paragraph (b), after “the amount” there is inserted “or
amounts by way of charges”;

(3) 10In section 101B (power to provide lateral drain following provision of public
sewer)—

(a) in subsection (3) (obligation to pay for drain requested), for “the costs
reasonably incurred in or in connection with providing that drain”
there is substituted “such charges as the undertaker may impose in
15accordance with charging rules”;

(b) after subsection (3) there is inserted—

“(3A) The sewerage undertaker may require the person making a
request under this section to provide such security for the
payment of the charges as charging rules allow.”;

(c) 20in subsection (4) (reference of disputes to Authority), for paragraph (b)
there is substituted—

“(b) the amount of any charge imposed,”;

(d) in subsection (4), after paragraph (b) there is inserted “or

“(c) the security required to be provided,”.

(4) 25In section 107 (right of a sewerage undertaker to undertake the making of a
communication with a public sewer)—

(a) in subsection (3)(b)(i) (no obligation for undertaker to act until paid an
estimated cost of the work in advance), for “the cost of the work” there
is substituted “the amount by way of charges that the undertaker may
30impose in accordance with charging rules for making the connection”;

(b) in subsection (3)(b)(ii) (no obligation for undertaker to act until given
security for payment), for “such security” to the end there is substituted
“such security for the payment of that amount as charging rules allow
and it may have required.”;

(c) 35for subsection (4), there is substituted—

“(4) If a payment to a sewerage undertaker under subsection (3)
exceeds the charges that may, in the event, be imposed in
accordance with charging rules for making the connection in
question, the excess is to be repaid by the undertaker; and, if
40and so far as those charges are not covered by a payment under
subsection (3), those charges are to be paid by the person for
whom the work was undertaken.”;

(d) in subsection (4A) (reference to disputes to Authority), in paragraph
(a), for “of the cost of works” there is substituted “of the amount of
45charges”;

(e) in subsection (4A), for paragraph (b) (and the “or” following it) there is
substituted—

“(b) the security required by the undertaker, or”;

(f) in subsection (4A), for paragraph (c) there is substituted—

“(c) whether any excess is repayable, or any charges are
payable, under subsection (4), or the amount of any such
excess or charges,”.

(5) 5In section 146 (connection charges etc, and charges for highway drainage), in
subsection (5)(a), after “expenses incurred by it in” there is inserted “, or
charges imposed by it for,”.

20 Charges for moving pipes

In section 185 of the Water Industry Act 1991 (duty to move pipes etc in certain
10cases), in subsection (5) (recovery of undertaker’s expenses), for the words
from “the undertaker” to the end there is substituted “the person serving the
notice is liable to pay to the undertaker such charges as the undertaker may
impose in accordance with charging rules”.

Sustainable drainage

21 15Drainage systems relieving public sewers

(1) After section 114 of the Water Industry Act 1991 there is inserted—

“Sustainable drainage

114A Drainage systems relieving public sewers

(1) Sewerage undertakers may construct, on their own or on another’s
20land, drainage systems for the purpose of reducing the volume of
surface water entering public sewers or the rate at which it does so.

(2) A sewerage undertaker may maintain and operate a drainage system
constructed by it under subsection (1).

(3) In this section—

• 25“drainage system” means a structure designed to receive
  rainwater and other surface water, other than a natural
  watercourse;

• “natural watercourse” means a river or stream;

• “rainwater” includes snow and other precipitation;

• 30“structure” includes—

  (a)

  any part of an existing or proposed structure, and

  (b)

  any feature or aspect of a design that is intended to
  receive or facilitate the receipt of rainwater or other
  surface water.

(4) 35The powers conferred by subsections (1) and (2) are not to be regarded
as functions of a sewerage undertaker for the purposes of section 155
(compulsory purchase of land required for the purposes of carrying out
functions of relevant undertakers).”

(2) In section 158 of that Act (powers to lay pipes in streets), in subsection (7)
40(meaning of reference to a relevant pipe), in paragraph (b)—

(a) omit the “or” at the end of both sub-paragraphs (i) and (ii);

(b) after sub-paragraph (iii) there is inserted “or

“(iv) any pipe forming part of, or required in
connection with, a drainage system constructed
under section 114A.”

(3) 5In Schedule 3 to the Flood and Water Management Act 2010 (sustainable
drainage), after paragraph 19 there is inserted—

“Exception 3: systems under section 114A Water Industry Act 1991

The adoption duty does not apply to a drainage system constructed
under section 114A of the Water Industry Act 1991 (drainage systems
relieving public sewers).”

CHAPTER 3 10Regulation of the water industry

General duties of the Water Services Regulation Authority

22 Primary duty to secure resilience

(1) Section 2 of the Water Industry Act 1991 (general duties with respect to water
industry) is amended as follows.

(2) 15In subsection (2A)—

(a) omit the “and” at the end of paragraph (c);

(b) after paragraph (d) insert “; and

(e) to further the resilience objective.”

(3) After subsection (2D) insert—

“(2DA) 20The resilience objective mentioned in subsection (2A)(e) is—

(a) to secure the long-term resilience of water undertakers’ supply
systems and sewerage undertakers’ sewerage systems as
regards environmental pressures, population growth and
changes in consumer behaviour, and

(b) 25to secure that undertakers take steps for the purpose of enabling
them to meet, in the long term, the need for the supply of water
and the provision of sewerage services to consumers,

including by promoting—

“(i) appropriate long-term planning and investment by relevant
30undertakers, and

(ii) the taking by them of a range of measures to manage water
resources in sustainable ways, and to increase efficiency in
the use of water and reduce demand for water so as to reduce
pressure on water resources.”

(2DB) 35For the purposes of subsection (2DA)—

(a) the reference to water undertakers’ supply systems is to be
construed in accordance with section 17B;

(b) the reference to sewerage undertakers’ sewerage systems is a
reference to the systems comprising—

(i) the systems of public sewers, the facilities for emptying
public sewers and the sewage disposal works and other
facilities for dealing effectually with the contents of
public sewers that undertakers are required to provide
5by section 94, and

(ii) the lateral drains that undertakers are required to
maintain by section 94.”

23 General duty as regards undue preference in the provision of services

In section 2 of the Water Industry Act 1991 (general duties of the Secretary of
10State and the Water Services Regulation Authority with respect to the water
industry), in subsection (3) (general considerations in exercising powers and
duties), after paragraph (b) there is inserted—

“(ba) to secure that no undue preference (including for itself) is
shown, and that there is no undue discrimination, in the doing
15by such a company of—

(i) such things as relate to the provision of services by itself
or another such company, or

(ii) such things as relate to the provision of services by a
water supply licensee or a sewerage licensee;”.

24 20Strategic priorities and objectives

(1) For section 2A of the Water Industry Act 1991 there is substituted—

“2A Strategic priorities and objectives: England

(1) The Secretary of State may from time to time publish a statement
setting out strategic priorities and objectives for the Authority in
25carrying out relevant functions relating wholly or mainly to England.

(2) The Authority must carry out those functions in accordance with any
statement published under this section.

(3) In formulating a statement under this section, the Secretary of State—

(a) must have regard to the duties imposed on the Authority under
30section 2,

(b) must have regard to social and environmental matters, and

(c) may have regard to such other matters as the Secretary of State
thinks fit.

(4) Before publishing a statement under this section, the Secretary of State
35must consult—

(a) the Authority,

(b) the Council,

(c) relevant undertakers,

(d) licensed water suppliers,

(e) 40the Environment Agency,

(f) the Welsh Ministers,

(g) the NRBW, and

(h) anyone else the Secretary of State thinks appropriate.

(5) Before publishing a statement under this section the Secretary of State
must—

(a) lay a draft of the statement before Parliament, and

(b) then wait until the end of the 40-day period.

(6) 5The Secretary of State may not publish the statement under this section
if, within the 40-day period, either House of Parliament resolves not to
approve it.

(7) “The 40-day period” means the period of 40 days beginning with the
day on which the draft is laid before Parliament (or, if it is not laid
10before each House on the same day, the later of the days on which it is
laid).

(8) When calculating the 40-day period, ignore any period during which
Parliament is dissolved or prorogued or during which both Houses are
adjourned for more than 4 days.

(9) 15In this section “relevant functions relating wholly or mainly to
England” means the functions mentioned in section 2(1)(b) so far as
they relate to appointment areas wholly or mainly in England.

(10) In subsection (9) “appointment area” means an area for which an
appointment is held under Chapter 1 of Part 2.

2B 20Strategic priorities and objectives: Wales

(1) The Welsh Ministers may from time to time publish a statement setting
out strategic priorities and objectives for the Authority in carrying out
relevant functions relating wholly or mainly to Wales.

(2) The Authority must carry out those functions in accordance with any
25statement published under this section.

(3) In formulating a statement under this section the Welsh Ministers—

(a) must have regard to the duties imposed on the Authority under
section 2,

(b) must have regard to social and environmental matters, and

(c) 30may have regard to such other matters as the Welsh Ministers
think fit.

(4) Before publishing a statement under this section, the Welsh Ministers
must consult—

(a) the Authority,

(b) 35the Council,

(c) relevant undertakers,

(d) licensed water suppliers,

(e) the NRBW,

(f) the Secretary of State,

(g) 40the Environment Agency, and

(h) anyone else the Welsh Ministers think appropriate.

(5) Before publishing a statement under this section the Welsh Ministers
must—

(a) lay a draft of the statement before the Assembly, and

(b) 45then wait until the end of the 40-day period.

(6) The Welsh Ministers may not publish the statement under this section
if, within the 40-day period, the Assembly resolves not to approve it.

(7) “The 40-day period” means the period of 40 days beginning with the
day on which the draft is laid before the Assembly.

(8) 5When calculating the 40-day period, ignore any period during which
the Assembly is dissolved or is in recess for more than 4 days.

(9) In this section “relevant functions relating wholly or mainly to Wales”
means the functions mentioned in section 2(1)(b) so far as they relate to
appointment areas wholly or mainly in Wales.

(10) 10In subsection (9) “appointment area” means an area for which an
appointment is held under Chapter 1 of Part 2.”

(2) In section 2(6A), (6B) and (7) of that Act (general duties with respect to water
industry), for “section 2A” there is substituted “sections 2A and 2B”.

(3) In section 192A of that Act (forward work programme), after subsection (3)
15there is inserted—

“(3A) The forward work programme for any year must also include an
explanation of how the projects described in it reflect any strategic
priorities or objectives published under section 2A or 2B.”

Regulation of relevant undertakers, water supply licensees and sewerage licensees

25 20Procedure for granting water supply and sewerage licences

(1) Section 17F of the Water Industry Act 1991 (procedure for granting water
supply licences) is amended as follows.

(2) For subsection (1) (application to be made as set out in regulations) there is
substituted—

“(1) 25The Authority must determine for each type of relevant application
that may be made—

(a) the form and manner in which an application is to be made;

(b) the information it is to contain;

(c) the documents that are to accompany it;

(d) 30the fee that is to accompany it.

(1A) The fees may be different in different circumstances.

(1B) The Authority may make a new determination as to a matter referred
to in subsection (1).

(1C) The Authority must publish a notice of what it has determined under
35subsection (1) or (1B) in such manner as it thinks appropriate for
bringing the determination to the attention of those affected by the
determination.

(1D) For the purposes of subsection (1) a relevant application is an
application for—

(a) 40the grant of a water supply or sewerage licence giving a
particular authorisation or combination of authorisations;

(b) the variation of a water supply or sewerage licence so that it
gives—

(i) a particular authorisation only, or

(ii) a particular combination of authorisations.

(1E) 5A person making a relevant application must comply with such
provisions of a notice published under subsection (1C) as relate to the
application.”

(3) Subsections (2), (3) and (5) (requirement for applicant to publish notice of an
application made) are repealed.

(4) 10In subsection (4) (procedure where the Secretary of State or the Authority
proposes to refuse an application), for “the application”, in the first place it
occurs, there is substituted “a relevant application”.

26 Extension of time limit for imposing financial penalties

(1) In section 22C of the Water Industry Act 1991 (time limits on the imposition of
15financial penalties), in subsection (1), for “twelve months” there is substituted
“five years”.

(2) But subsection (1) does not apply in relation to a contravention or failure
which—

(a) occurred before the date on which this section comes into force, and

(b) 20is not continuing on that date.

27 Water resources management plans for England: resilience

(1) Chapter 1 of Part 3 of the Water Industry Act 1991 (water supply) is amended
as follows.

(2) In section 37A(3) (water resources management plans: preparation and
25review), at the end insert—

“(and see also section 37AA).”

(3) After that section insert—

“37AA Water resources management plans for England: resilience

(1) The Secretary of State may give a direction about the basis on which a
30water resources management plan for England is to be prepared.

(2) A direction under this section may be given only where the Secretary of
State considers it appropriate to do so with a view to securing that a
water undertaker is able to meet the need for the supply of water to
consumers in particular circumstances.

(3) 35A direction under this section may, in particular, require a plan to be
prepared on the basis of a specified assumption, including—

(a) an assumption as to whether, and how often, specified
circumstances are likely to arise;

(b) an assumption that a specified power would or would not be
40exercised by the water undertaker or another person in
specified circumstances.

(4) Before giving a direction under this section, the Secretary of State must
consult—

(a) the Authority,

(b) the Welsh Ministers,

(c) 5each water undertaker to whom the direction would apply,

(d) the Environment Agency,

(e) the NRBW, and

(f) such other persons as the Secretary of State considers
appropriate.

(5) 10In this section—

• “specified” means specified in a direction under this section;

• “water resources management plan for England” means a water
  resources management plan prepared by a water undertaker
  whose area is wholly or mainly in England.”

(4) 15In section 37D(1) (water resources management plans: directions), after “37A”
insert “, 37AA”.

28 Frequency of water resources management and drought plans

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

(2) In section 37A (water resources management plans: preparation and review)—

(a) 20in subsection (1), after “prepare” there is inserted “, publish”;

(b) in subsection (4), after “preparing” there is inserted “and publishing”;

(c) in subsection (6), in the opening words, after “prepare” there is inserted
“and publish”.

(3) In section 37D (water resources management plans: supplementary), after
25subsection (3) there is inserted—

“(4) The Minister may by order made by statutory instrument amend the
period for the time being specified in section 37A(6)(c).

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

(a) the Secretary of State, in relation to an order applying to water
30undertakers whose areas are wholly or mainly in England, and

(b) the Welsh Ministers, in relation to an order applying to water
undertakers whose areas are wholly or mainly in Wales.

(6) A statutory instrument containing an order made by the Secretary of
State under subsection (4) is subject to annulment in pursuance of a
35resolution of either House of Parliament.

(7) A statutory instrument containing an order made by the Welsh
Ministers under subsection (4) is subject to annulment in pursuance of
a resolution of the Assembly.

(8) Subsection (9) applies in relation to a statutory instrument containing
40both—

(a) an order made by the Secretary of State under subsection (4),
and

(b) an order made by the Welsh Ministers under subsection (4).