Trade effluent appeals

This information note explains the way Ofwat approaches appeals against the imposition or variation in consents governing the discharge of trade effluent to public sewers.

Discharge conditions

Businesses must have the consent of the sewerage company, under Section 118 of the Water Industry Act 1991, before discharging trade effluent into public sewers. Trade effluent is defined in Section 141.

The sewerage company may impose conditions about the timing, quantity, quality, temperature, acidity or alkalinity of the effluent. It may also require the discharger to provide and maintain inspection and measuring facilities, keep records and report regularly to the sewerage company.

The sewerage company charges for receiving and disposing of trade effluent. Charges may be levied through the company’s published Charges Scheme or by agreement with the discharger. Dischargers usually pay according to a formula (based on the Mogden formula) which takes account of standard characteristics which have a bearing on the treatment needed and therefore costs (for example, rate of discharge, suspended solids and oxygen demand).

Under guidelines adopted in 1976 and renewed in 1986, charges have traditionally been set to recover the relevant costs of receiving and treating trade effluent. The costing may be averaged across a region and may not reflect costs incurred at any one treatment works. Those guidelines make provision for charges to be reduced if a discharger contributes to the sewerage company’s capital costs.

The Urban Waste Water Treatment (England and Wales) Regulations 1994 require discharges to be subject to pre-treatment conditions to ensure:

  • the protection of those involved in sewerage activities
  • the protection of sewerage systems and operations
  • that discharges from the undertaker’s works do not damage the environment, or cause receiving waters to breach an EC standard
  • the safe disposal of sewage sludge


Role of Ofwat in trade effluent appeals

Sections 122 and 126 of the Water Industry Act 1991 give Ofwat powers to determine certain appeals. The appeals procedure:

  • does not cover disputed charges within the sewerage companies’ published charges schemes, but does cover disputes about the conditions imposed and charges which fall outside the charges scheme
  • does not cover appeals against any conditions governing reception, treatment or disposal of “special category effluent”

Most disputes arise over the practical implications of the consent conditions imposed, the timescale in which such conditions must be met, or the costs which meeting the conditions imposes on the discharger. Ofwat should normally receive appeals within two months of the receipt of a revised direction. Before considering any appeal Ofwat expects the sewerage company to have fully explained the reasons for any special conditions or costs to the discharger. We also expect the discharger to have discussed the matter with the undertaker and explained why he feels unable to accept the conditions. We would expect negotiations to have taken place, and to continue to take place once the appeal is lodged.

When we receive an appeal we ask both parties for their representations. It may be possible for the appeal to be resolved informally by adoption of suggestions made by Ofwat. If not, and dependant on the complexity of the issues at stake, and after taking account of the views of the appellant and undertaker, Ofwat will decide whether the appeal will be dealt with by:

  • written representations
  • private hearings
  • private enquiry

Once all the information has been gathered a formal decision will be issued.

If we consider that the charges scheme shows undue preference to, or undue discrimination against, particular trade effluent dischargers Ofwat may take action against the sewerage company.

Criteria adopted by Ofwat

Within legal constraints, appeals will normally be decided in light of Ofwat’s understanding of the practical and financial consequences for both sewerage company and discharger. Health and safety requirements will be taken into account and consideration given to any substances likely to damage sewers, or cause special difficulty (or expense) in treatment.

As well as a general duty to protect customer interests, we also have a specific duty, in deciding trade effluent appeals, to have regard to the desirability of a sewerage company recovering costs incurred, including a reasonable return on capital. Therefore:

  • We must be satisfied that a new or amended condition is justified. The conditions imposed by the sewerage company should be related to the discharge conditions imposed on it by the Environment Agency, to meet environmental obligations in respect of sewage treatment works and storm overflows. If not, there must be a good explanation.
  • We will need to establish and then compare the long-term cost implications, for the discharger and sewerage company respectively, of treating the effluent at minimum cost to meet environmental obligations. The estimates will have to take account of all of the consequences of the new or revised requirements, especially changes in necessary processes. Evidence will also be required about sensible timetables for the achievement of these changes.

In respect of standard effluent characteristics (for example, rate of discharge, suspended solids and oxygen demand) sewerage companies should not rely solely on the argument that they have insufficient treatment capacity. Ofwat may order the postponement of any discharge until a specified date by which the company could reasonably be expected to carry out work to receive the effluent at appropriate charges.

In respect of non-standard characteristics or substances which inhibit sewage treatment, companies will be expected to define any special conditions or special charges within a well-defined and even-handed overall policy.

If, after consideration of all of these factors, the disputed condition is justified on its merits, we will judge whether the discharger’s long-term costs of complying with standards set are less than those reasonably estimated by the sewerage company to treat the discharge to the same environmental standard at their works. If they are, we will normally dismiss the discharger’s appeal. If the discharger’s costs are more than those of the sewerage company, then Ofwat will normally uphold the appeal. If necessary, we will investigate how the sewerage company’s costs can be properly recovered, as far as practicable from dischargers to the works concerned.

Further information

E-mail address: [email protected]

May 1993
Revised September 2001