Complaint against Affinity Water about the reasonableness of connection costs

Case number

OFW-0016493

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.

  1. 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.
  2. 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.

Relevant powers

Sections 30A and 45 of the Water Industry Act 1991

Date opened

28 September 2016

Date closed

6 December 2016

Key documents

Paradise vs Affinity Water: Final determination of dispute determined under sections 45(6A) and 30A of the Water Industry Act 1991

Enquiries

If you have a query, please contact: casemanagementoffice@ofwat.gsi.gov.uk

Media enquiries to: 0121 644 7642/7821 or pressofficeteam@ofwat.gsi.gov.uk

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