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 £634.11 (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 – In line with the ‘Comparative Study: Cost of new water supply connections work (Section 45 Water Industry Act 1991’, we compared Affinity Water’s cost of the works to the median range of costs assessed as reasonable for making a similar connection. There are scenarios where we will consider comparing the cost of the works to either the minimum range or the maximum range. For example, if the excavation and reinstatement work was carried out entirely by the customer then we would consider comparing the cost of the works to the minimum range. In this case, the Complainant carried out the reinstatement work and Affinity Water and the Complainant carried out the excavation work (although Affinity Water did not charge for its excavation work).
- 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
10 May 2016
25 January 2017
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