Summary of case
This dispute was about the charges made by Southern Water for making new water supply connections to two blocks of flats 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 Southern Water’s charge was too high and that the company should refund £5,863.69 (plus interest) to the customer.
Wider lessons for companies and customers
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’.
If a water company believes that a higher charge is justified, it must set out compelling evidence to demonstrate what administration activities it is carrying out, the costs that it incurred in providing the activities and the reasons these activities were necessary in order to provide the customer with the new connection(s).
07 November 2016
18 July 2017
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