If, as a new appointee, you are providing new water supplies for domestic purposes (such as to new housing developments), you are legally entitled to levy infrastructure charges. These can be raised where premises are connected to the water company’s water supply (or to the sewerage company’s sewers) for the first time.
Calculating infrastructure charges
For new appointees that are wholly or mainly in Wales, infrastructure charges are calculated in accordance with Condition C of each water companies’ licence of appointment. This is currently a fixed sum per new connection.
For new appointees that are wholly or mainly in England, the new appointee’s licence typically limits the maximum infrastructure charges that can be charged for new connections to those which would imposed by the existing appointee.
Infrastructure charges and bulk supply agreements
New appointees often provide water and wastewater services to their customers by securing a bulk supply or bulk discharge agreement with the local incumbent water or wastewater company. Where such an agreement is in place, infrastructure charges are generally dealt with in the bulk supply agreements, with new appointees agreeing to levy such charges on their customers and pass them through to the existing appointee, while taking some consideration of the potential needs of the new appointee to reinforce its own network. We support this approach in that it is generally the existing appointee that owns the relevant network that may need to be enhanced.
The Water Industry Act 1991 does not explicitly set out the timing of infrastructure charge payments. Our view is that we consider infrastructure charges are payable to you, as a new appointee, when supply is made available – that is, when the first time connection is made. The timing of the payment by you to the existing appointee should be covered within your bulk supply agreement.