Summary of case
This dispute was about the charge made by Affinity Water for making a new water supply connection to a residential property and it was referred to us for determination under section 45 of the Water Industry Act 1991.
Summary of Ofwat’s final decision
We have determined that Affinity Water’s charge was too high and that the company should refund £1,022.09 (plus interest) to the customer.
Wider lessons for companies and customers
This case has highlighted two particular issues that we would like to draw out.
- Affinity Water’s charge for making the connection was higher than we would expect – as a starting point, we would expect the costs for a new water supply connection to be no more than the median cost set out in ‘Comparative Study: Cost of new water supply connections work (Section 45 Water Industry Act 1991) (the ‘benchmark report’)’. We use this report to assess the reasonableness of charges made for making new water supply connections. In this case, as Affinity Water did not carry out any trench excavation, backfill or reinstatement, tasks which are typically associated with making a new water supply connection, we compared its costs to the minimum cost set out in the benchmark report.
- Affinity Water’s administration charges were higher than we would expect – as a starting point, we would expect the administration costs for a new water supply connection to be no more than £105.30. This is the reasonable charge set out in ‘Independent review of section 45 administration fee and overhead costs on behalf of the Water Services Regulation Authority (Ofwat) – summary’. We would expect this to include the cost of the application for the connection. In this case, Affinity Water charged in excess of this through charging multiple administration fees.
Sections 30A and 45 of the Water Industry Act 1991
28 September 2016
6 December 2016
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