New Appointments and Variations (NAVs)

A new appointment is made where a limited company is appointed by us to provide water and/or sewerage services for a specific geographic area.

A variation is where an existing appointed company (an “appointee”) asks Ofwat to vary its appointment so it can extend the areas it provides services to.  A new appointee has the same duties and responsibilities as the previous statutory water company.

A NAV therefore involves one company replacing another as the appointee for a specific geographic area.

Who is eligible?

In order to choose a new appointee, a customer’s site must meet one of the following criteria.

  • The unserved criterion: Their site has no existing mains water connection and it has no existing mains sewer connection.
  • The consent criterion: The existing local monopoly supplier agrees to transfer the site or premises to another company.
  • The large user criterion: The site is in Wales and the customer uses more than 250 megalitres of water a year.
    The site is in England and the customer uses more than 50 megalitres of water a year.

Please see ‘New appointments and variations – a statement of our policy‘ for further information.

Which companies are new appointees?

Any limited company can apply to become a new appointee.

How does it work?

A customer can choose a new appointee for water, or sewerage services, or water and sewerage services at qualifying sites. Once they change their supplier to a new appointee, it will take over responsibility for providing those services to their site.

New appointees either get their water from their own source, such as a borehole, or they buy it wholesale from another company. They either treat sewage in their own plants, or they discharge it into another company’s sewers.

The new appointee may introduce its own water into the public supply system. It may also buy its water from another company (a “bulk supply”), in which case it needs to negotiate a price for that water before it can begin to charge the customer. Customers will continue to use the water from the public supply, and the Drinking Water Inspectorate confirms that it is safe to use before their new supply begins.

If the new appointee has its own sewerage treatment works, then it will need the Environment Agency’s permission to discharge the treated sewage into the environment. If the new appointee discharges the wastewater to another company’s sewers (a “bulk discharge”), it will need to negotiate a price for this before they can begin to charge you.

What do you need to do to become a new appointee?

Once a customer has contacted you about their supply, you will need to apply to us to be appointed to their site or premises. We will make sure that the customer is eligible to switch to you, and that you have the resources to supply the customer with water or sewerage services, or both.

Before we can make the appointment the customer will need to provide you with a signed letter of consent confirming that they agree to the switch.

How long does it take?

We aim to make the new appointment within 110 working days of receiving a completed application you. This may take longer in some circumstances.

Please see ‘New appointment and variation applications – a statement of our process‘ for further information.

How we regulate new appointees

We have the same powers to regulate new appointees as we have to regulate existing monopoly water companies. This includes making sure that each new appointee is financially viable.

We have a legal duty to protect the interests of consumers, wherever appropriate by promoting effective competition.

When we consider applications for new appointments, one of our primary concerns is that customers should be ‘no worse off’ if they are supplied by a new appointee than if they were supplied by the existing appointee for that area. This means that the quality of services and the charges for water and sewerage services must be at least comparable.

Similarly, the Drinking Water Inspectorate must also be satisfied that the new appointee can supply safe drinking water before an appointment can be granted.


Further information

More information is available in the documents below.

Terms of reference for independent professional advisers providing site status reports

Bulk supply pricing policy principles

Assessing the financial viability of applications for new appointments and variations

Study of the NAV market – report from Frontier Economics

Study of the market for new appointments and variations – summary of findings and next steps