Complaint against Severn Trent about the reasonableness of connection costs

Case number

OFW-0012559

Summary of case

This dispute was referred to us for determination under sections 45 and 30A of the Water Industry Act 1991.

The dispute was between Mr. Gold and Severn Trent Water about the expenses incurred and charged by Severn Trent Water in connecting a new water supply to his property premises.

Summary of Ofwat’s final decision

The total of the application fee and overhead costs charged by Severn Trent Water was higher than we would reasonably expect for this complex type of connection.

Ofwat required Severn Trent Water to refund the sum of £1.009.01 plus interest to Mr Gold.

Wider lessons for companies and customers

Ofwat uses the Hyder Report and the independent review of section 45 administration fee and overhead costs to inform our consideration of whether companies’ costs for providing a new water supply are reasonably incurred. The figures included in both of these reports are benchmarks, not suggested charges. The costs companies actually incur may reasonably be higher or lower than these benchmarks. Ofwat does not consider that companies should be charging the maximum costs for all of its connection works, as a blanket approach
Ofwat assesses every case on its individual merit. Companies should be able to provide justification for the costs they have charged

Relevant powers

Section 45 of the Water Industry Act 1991

Relevant Ofwat guidance

Charging for new connections
Water Services Regulation Authority (Ofwat) Comparative Study: Cost of new water supply connections work (Section 45 Water Industry Act 1991)
Independent Review of Section 45 Connection Costs

Date opened

30 June 2014

Date closed

9 April 2015

Key documents

Final determination

Enquiries

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