Summary of case
This dispute was referred to us for determination under sections 42 and 30A of the Water Industry Act 1991.
The complainant disputed the amount Anglian Water had charged them for providing new water mains to serve five development sites. The developer referred the dispute to us because it believed the charges were too high. It believed the charges should not include contributions to strategic schemes on the existing network, and that Anglian Water’s calculation of the charges had not appropriately reflected the charges expected to be payable to Anglian Water from the premises to be served by the requisitioned mains.
Summary of our final decision
We concluded the following.
- Anglian Water is able to include all but one of the disputed contributions towards strategic schemes on the existing network in its calculation of the requisition charges. These contributions should reflect the proportion of the total capacity provided by the strategic schemes that are attributable to the new mains requisitioned by the developer. The remaining disputed contribution should not be included in the charges calculation because Anglian Water no longer believes this work to have been necessary in consequence of the requisitioned main.
- For the purposes of calculating the requisition charge, the charges expected to be payable to Anglian Water from the premises served by the relevant requisitioned mains (used as the estimated revenue) should include the charges expected to be payable during the first year following the provision of the new main (that is, Year 1 of the DAD calculation). The estimated revenue for each year should also include charges expected to be payable from premises that became billable part-way through a year
- It is reasonable for Anglian Water for to use its average metered bill to estimate the charges expected to be payable by premises to be served by the requisitioned mains. For those of the development sites for which all final actual costs were available we recalculated the final requisition charges on the basis of our determination. For those of the development sites for which the final costs were not yet available we determined the security payment Anglian Water can reasonably require from the developer on the basis of the fullest cost information available. As a result we determined that Anglian Water should refund the developer a total of £56,907.62.
Wider lessons for companies and customers
- When calculating a requisition charge, water companies can include costs associated with providing specific off-site or strategic reinforcement works, providing they can demonstrate that the costs were reasonably incurred and the works were necessary in consequence of the requisitioned main.
- Including contributions to off-site reinforcement when calculating a requisition charge, does not prevent the water companies from also requiring the payment of infrastructure charges for premises connected to the network for the first time.
- When calculating a requisition charge, the water company should seek to use the most accurate information that is reasonably available, including for its estimate of the charges expected to be payable from premises to be served by the requisitioned main.
Section 42 of the Water Industry Act 1991
7 December 2012
22 January 2016
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