PN 37/18: Ofwat consults on modernising water company licences


Ofwat is to consult on proposals to simplify some of the licence conditions of water companies across England and Wales to set out companies’ obligations in clear, accessible and understandable language.

Over the past year, the regulator has worked with the sector and identified a number of areas where licences can be simplified and streamlined, including removing conditions which are no longer relevant or don’t reflect the environment in which companies now operate.

Ofwat is inviting stakeholders to respond to its consultation by 19 October 2018.
Notes to editor:

  • CLICK HERE to download the consultation document
  • Water companies operating the public water networks hold an Instrument of Appointment (sometimes called a “licence”) as water undertakers, and those operating the public wastewater networks hold Appointments as sewerage undertakers, for the purposes of the Water Industry Act 1991.
  • Companies’ Instruments of Appointment set out:
    – The services the company must or may provide; and
    – The obligations that the company must comply with in delivering those services.
  • The text of each Instrument of Appointment (as of 18 September 2018) is available to download from Ofwat’s website HERE
  • This exercise simplifies and streamlines areas of companies’ licences.  It is distinct from proposals on licence changes related to Ofwat’s Board Leadership, Transparency and Governance Principles, and bringing all companies’ licences up to the current best standard of ring-fencing.
  • Under Section 13 of the Water Industry Act 1991 (WIA91), Ofwat can modify the conditions of a company’s licence if it agrees to the changes Ofwat is proposing to make.