New connections charging rules
From 1 April 2018, Ofwat introduced new rules that govern the charges that undertakers whose areas are wholly or mainly in England can impose when providing new connection services.
The Charging Rules for New Connection Services (English Undertakers) replaced the charging arrangements that were previously set out in the Water Industry Act of 1991 (WIA91). Under these rules, companies are required to determine charges in accordance with the following principles:
(a) fairness and affordability;
(b) environmental protection;
(c) stability and predictability; and
(d) transparency and customer-focused service.
The latest charging rules are available in full here. They in effect until 31 March 2020. The key arrangements they cover are requisition charges; income offsets and asset payments; connection charges, and diversion charges.
Infrastructure charges are set out in the Charges Scheme Rules – in effect until 31 March 2020.
Charging rules from April 2020
We made a decision to amend our charging rules and the changes will come into effect from 1 April 2020:
- Charging Rules for New Connection Services (English Undertakers) from April 2020; and
- Charges Schemes Rules from April 2020.
The key documents related to the current charging rules, including the consultation, consultation responses and decision document, can be found here.
In November 2017 we concluded on making changes to the new connection charging rules with respect to the treatment of the income offset, to come into effect from April 2020. You can find the full decision document here.
Directions and enforcement powers
In certain cases, if Ofwat considers that a water undertaker is not acting as required by the rules, Ofwat may give the undertaker a direction to ensure compliance. It is the duty of the undertaker to comply with the direction, and Ofwat may enforce this duty.