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WSL 06/06

28 June 2006


Dear Colleague

MODIFICATION TO APPOINTMENT CONDITION R – CONSULTATION

This letter explains the proposal to change appointed water companies' Condition R and asks for your views on this. A new issue has arisen which means that we need to consult on an amendment to Condition R.

Background

Each appointed water company has a responsibility to prepare an access code. The company must also review that code annually by no later than 15 September. The company may revise its access code at any time and, if Ofwat revises its guidance, the company must revise its access code to conform to that guidance in the circumstances set out in Condition of Appointment R 3.

Recently, appointed water companies have asked that they be allowed to review and revise their codes by 15 October in each year. This extra time would allow them to manage better their access code work with their other work, including June Returns submissions and preparation of draft Principal Statements, as well as avoiding the peak holiday season.

We are persuaded by the views put to us by appointed water companies, as long as the extra time to revise codes does not lead to delays in agreeing Wholesale Master Agreements (WMAs) or effecting customer transfers. We therefore propose to amend Condition R to allow undertakers to revise their codes by 15 October every year.

Our proposal

The text attached at annex A sets out the proposed amendments to Condition R, shown as changes to the existing text. We would like your views on these amendments.

Please send your comments on the consultation by Wednesday 19 July 2006 to Hayley Purcell at the above address. You may also e-mail your responses to hayley.purcell@ofwat.gsi.gov.uk.

Unless otherwise requested, we will put all responses in the Ofwat library and make them available to the public. We would appreciate early responses.

Yours sincerely



Keith Mason
Director of Regulatory Finance and Competition