House of Lords portcullis
House of Lords
Session 2002 - 03
Internet Publications
Other Bills before Parliament

Water Bill [HL]


Water Bill [HL]
Schedule 4 — Licensing of water suppliers

    156

 

                    (b)                   having taken any such steps, to permit the requested

introduction of the water into that system.

              (4)             A water undertaker shall not be required by virtue of this section to

permit the introduction of water into its supply system, or to take

any steps to enable a qualifying water supplier to make such an

5

introduction, if the first or second condition is satisfied.

              (5)             The first condition is that permitting the introduction of the water

into the water undertaker’s supply system would—

                    (a)                   require the undertaker, in order to meet all its existing

obligations to supply water for domestic or other purposes,

10

together with its probable future obligations to supply

buildings and parts of buildings with water for domestic

purposes, to incur unreasonable expenditure in carrying out

works; or

                    (b)                   otherwise put at risk its ability to meet any of the existing or

15

probable future obligations mentioned in paragraph (a)

above.

              (6)             The second condition is that there is a contravention in relation to the

water fittings used or to be used in connection with—

                    (a)                   the supply of water to the premises to be supplied by the

20

supplier; or

                    (b)                   the use of water in those premises,

                              of such of the requirements of regulations under section 74 below as

are prescribed for the purposes of section 66A(6) above.

              (7)             Where—

25

                    (a)                   a request has been made by a qualifying licensed water

supplier to a water undertaker for the purposes of subsection

(1) or (2) above; and

                    (b)                   the steps which the undertaker is required to take by virtue

of that request include steps for the purpose of obtaining any

30

necessary authority for, or agreement to, any exercise by it of

any of its powers or the carrying out by it of any works,

                              the failure of the undertaker to acquire the necessary authority or

agreement shall not affect any liability of the supplier, under any

term or condition in accordance with which those steps are taken, to

35

reimburse the undertaker in respect of some or all of the expenses

incurred by it in taking those steps.

              (8)             In this section “treatment works”—

                    (a)                   in relation to a water undertaker, means the works

designated as treatment works by the Secretary of State for

40

the purposes of section 17B(6) above;

                    (b)                   in relation to a qualifying licensed water supplier, means the

works designated from time to time by the Secretary of State

as treatment works for the purposes of this paragraph.

              (9)             Before designating any works for the purposes of subsection (8)(b)

45

above, the Secretary of State shall consult the Assembly.

              (10)            A list of any works designated for the purposes of subsection (8)(b)

above shall be published from time to time by the Secretary of State

 

 

Water Bill [HL]
Schedule 4 — Licensing of water suppliers

    157

 

in such manner as he considers appropriate for the purpose of

bringing the designations to the attention of persons likely to be

affected by them.

              (11)            Any pipe laid in pursuance of subsection (3)(a)(ii) or (iii) above shall

be regarded as a water main for the purposes of this Act, subject to

5

any provision to the contrary.

              (12)            In this section and section 66C below, references to a qualifying

licensed water supplier are references to a licensed water supplier

which is the holder of a combined licence (within the meaning of

Chapter 1A of Part 2 of this Act).

10

       66C            Wholesale water supply by secondary water undertaker

              (1)             This section applies where—

                    (a)                   a qualifying licensed water supplier—

                           (i)                          requests a water undertaker other than its primary

water undertaker (the “secondary water undertaker”)

15

to provide a supply of water for the purpose of the

supplier supplying water, using the primary water

undertaker’s supply system, to the premises of the

supplier’s customers in accordance with the retail

authorisation; and

20

                           (ii)                         requests its primary water undertaker to permit it to

introduce that water into its supply system; and

                    (b)                   the premises are in the area of the primary undertaker.

              (2)             Where this section applies—

                    (a)                   it shall be the duty of the secondary water undertaker, in

25

accordance with an agreement or determination for such

period and containing such terms and conditions as may be

provided for under section 66D(2) below—

                           (i)                          to take any such steps in respect of its supply system

as may be so provided for in order to enable it to

30

provide the requested supply; and

                           (ii)                         having taken any such steps, to provide that supply;

and

                    (b)                   it shall be the duty of the primary water undertaker, in

accordance with an agreement or determination for such

35

period and containing such terms and conditions as may be

provided for under section 66D(2) below—

                           (i)                          to take any such steps specified in subsection (3)

below as may be so provided for in order to enable the

licensed water supplier to make the introduction of

40

requested supply of water into the primary

undertaker’s supply system; and

                           (ii)                         having taken any such steps, to permit the

introduction of that supply of water into that supply

system.

45

              (3)             The steps mentioned in subsection (2)(b)(i) above are steps—

                    (a)                   for the purpose of connecting the premises in question with

the primary undertaker’s supply system;

 

 

Water Bill [HL]
Schedule 4 — Licensing of water suppliers

    158

 

                    (b)                   for the purpose of connecting that system with the secondary

water undertaker’s supply system; or

                    (c)                   in respect of the primary undertaker’s supply system.

              (4)             If the first or second condition is satisfied—

                    (a)                   a secondary water undertaker shall not be required by virtue

5

of this section to provide a supply of water to a licensed water

supplier; and

                    (b)                   a primary water undertaker shall not be required by virtue of

this section to permit the introduction of water into its supply

system, or to take any steps to enable the licensed water

10

supplier to make such an introduction.

              (5)             The first condition is that the provision of the supply or permitting

the introduction would—

                    (a)                   require the undertaker in question, in order to meet all its

existing obligations to supply water for domestic or other

15

purposes, together with its probable future obligations to

supply buildings and parts of buildings with water for

domestic purposes, to incur unreasonable expenditure in

carrying out works; or

                    (b)                   otherwise put at risk its ability to meet any of the existing or

20

probable future obligations mentioned in paragraph (a)

above.

              (6)             This second condition is that there is a contravention in relation to

the water fittings used or to be used in connection with—

                    (a)                   the supply of water to the premises to be supplied by the

25

supplier; or

                    (b)                   the use of water in those premises,

                              of such of the requirements of regulations under section 74 below as

are prescribed for the purposes of section 66A(6) above.

              (7)             Where—

30

                    (a)                   requests have been made by a licensed water supplier to its

primary water undertaker and secondary water undertaker

for the purposes of subsection (1) above; and

                    (b)                   the steps which either of those undertakers is required to take

by virtue of the request made to it include steps for the

35

purpose of obtaining any necessary authority for, or

agreement to, any exercise by it of any of its powers or the

carrying out by it of any works,

                              the undertaker’s failure to acquire the necessary authority or

agreement shall not affect any liability of the licensed water supplier,

40

under any term or condition in accordance with which those steps

are taken, to reimburse the undertaker in respect of some or all of the

expenses incurred by it in taking those steps.

              (8)             Any pipe laid in pursuance of subsection (2)(b)(i) above by virtue of

subsection (3)(b) above shall be regarded as a water main for the

45

purposes of this Act, subject to any provision to the contrary.

 

 

Water Bill [HL]
Schedule 4 — Licensing of water suppliers

    159

 

       66D                        Sections 66A to 66C: determinations and agreements

              (1)             The Authority may determine, in a case referred to it by a licensed

water supplier, whether any condition specified in section 66A(4) to

(6), 66B(5) or (6) or 66C(5) or (6) above is satisfied (subject to section

66F below).

5

              (2)             The period for which and terms and conditions on which a water

undertaker is to perform any duty under sections 66A to 66C above

are—

                    (a)                   those which are—

                           (i)                          in a case falling within section 66A(2) or 66B(3) above,

10

agreed between the water undertaker and the

licensed water supplier in question; and

                           (ii)                         in a case falling within section 66C(2) above, agreed

between the water undertakers and the licensed

water supplier in question; or

15

                    (b)                   in default of such agreement, those which are determined by

the Authority, in a case referred to it by the licensed water

supplier in question, if they are acceptable to the supplier,

                              (subject to the following provisions of this section and sections 66E

and 66F below).

20

              (3)             The charges payable by a licensed water supplier to a water

undertaker under an agreement under paragraph (a)(i) or (ii) of

subsection (2) above or a determination under paragraph (b) of that

subsection shall be fixed in accordance with the costs principle set

out in section 66E below.

25

              (4)             The Authority shall issue guidance in accordance with which the

terms and conditions of an agreement under paragraph (a)(i) or (ii)

of subsection (2) above shall be made.

              (5)             Before issuing guidance under subsection (4) above, the Authority

shall consult such persons as it considers appropriate.

30

              (6)             The guidance issued under subsection (4) above shall include

guidance with respect to the fixing of charges in accordance with

subsection (3) above.

              (7)             Subsection (8) below applies if it appears to the Authority that an

agreement under paragraph (a)(i) or (ii) of subsection (2) above has

35

not been made in accordance with—

                    (a)                   subsection (3) above; or

                    (b)                   the guidance issued under subsection (4) above.

              (8)             The Authority may require the parties to the agreement to—

                    (a)                   modify the agreement; or

40

                    (b)                   terminate the agreement,

                              and that requirement shall be enforceable under section 18 above by

the Authority.

              (9)             Neither the Office of Fair Trading nor the Authority may exercise, in

respect of an agreement under paragraph (a)(i) or (ii) of subsection

45

(2) above, the powers conferred by—

 

 

Water Bill [HL]
Schedule 4 — Licensing of water suppliers

    160

 

                    (a)                   section 32 of the Competition Act 1998 (directions in relation

to agreements); and

                    (b)                   subsection (2) of section 35 of that Act (interim directions).

              (10)            Subsection (9)(b) above does not apply to the exercise of powers in

respect of conduct—

5

                    (a)                   which is connected with an agreement under paragraph (a)(i)

or (ii) of subsection (2) above; and

                    (b)                   in respect of which subsection (1)(b) of section 35 of that Act

applies.

       66E            Section 66D: costs principle

10

              (1)             The costs principle referred to in subsection (3) of section 66D above

is that the charges payable by a licensed water supplier to a water

undertaker, under the agreement or determination mentioned in that

subsection, shall enable the undertaker to recover from the

supplier—

15

                    (a)                   any expenses reasonably incurred in performing any duty

under sections 66A to 66C above in accordance with that

agreement or determination, and

                    (b)                   the appropriate amount in respect of qualifying expenses and

a reasonable return on that amount,

20

                              to the extent that those sums exceed any financial benefits which the

undertaker receives as a result of the supplier supplying water to the

premises of relevant customers.

              (2)             In subsection (1) above “qualifying expenses” means expenses

(whether of a capital nature or otherwise) that the water undertaker

25

has reasonably incurred or will reasonably incur in carrying out its

functions.

              (3)             For the purposes of subsection (1)(b) above, the appropriate amount

is the amount which the water undertaker—

                    (a)                   reasonably expected to recover from relevant customers; but

30

                    (b)                   is unable to recover from those customers as a result of their

premises being supplied with water by the licensed water

supplier.

              (4)             Nothing in subsection (3) above shall enable a water undertaker to

recover any amount—

35

                    (a)                   to the extent that any expenses can be reduced or avoided; or

                    (b)                   to the extent that any amount is recoverable in some other

way (other than from other customers of the undertaker).

              (5)             In this section “relevant customers” means customers to whose

premises the licensed water supplier is to make any supply of water

40

in connection with which the agreement or determination

mentioned in subsection (1) above is made.

       66F            Section 66D: supplementary

              (1)             Before the Authority makes—

 

 

Water Bill [HL]
Schedule 4 — Licensing of water suppliers

    161

 

                    (a)                   a determination for the purposes of subsection (1) of section

66D above as to whether any condition specified in section

66B(5) or (6) above is satisfied; or

                    (b)                   a determination for the purposes of subsection (2)(b) of

section 66D above as to the period for which and terms and

5

conditions on which a water undertaker is to perform any

duty under section 66B above,

                              it shall consult the Secretary of State (subject to subsection (3) below).

              (2)             Before the Authority makes—

                    (a)                   a determination for the purposes of subsection (1) of section

10

66D above as to whether any condition specified in section

66C(5) or (6) is satisfied; or

                    (b)                   a determination for the purposes of subsection (2)(b) of

section 66D above as to the period for which and terms and

conditions on which the water undertakers are to perform

15

any duty under section 66C above,

                              it shall consult the Secretary of State (subject to subsections (3) and

(4) below) and the Environment Agency.

              (3)             If a determination mentioned in subsection (1) or (2) above—

                    (a)                   is in relation to premises supplied with water using the

20

supply system of a water undertaker whose area is wholly or

mainly in Wales; and

                    (b)                   in the case of a determination mentioned in subsection (2)

above, the area of the secondary undertaker in question is

wholly or mainly in Wales,

25

                              the Authority shall consult the Assembly (and not the Secretary of

State).

              (4)             If a determination mentioned in subsection (2) above—

                    (a)                   is in relation to premises supplied with water using the

supply system of a water undertaker whose area is wholly or

30

mainly in—

                           (i)                          England; or

                           (ii)                         Wales;

                    (b)                   but the area of the secondary water undertaker in question is

(respectively) wholly or mainly in—

35

                           (i)                          Wales; or

                           (ii)                         England,

                              the Authority shall consult the Assembly (as well as the Secretary of

State).

              (5)             The Authority shall publish guidance issued under section 66D(4)

40

above in such manner as the Authority considers appropriate for the

purpose of bringing it to the attention of persons likely to be affected

by it.

              (6)             The Authority may from time to time revise the guidance so issued.

              (7)             Before revising any guidance under subsection (6) above, the

45

Authority shall consult such persons as it considers appropriate.

 

 

Water Bill [HL]
Schedule 4 — Licensing of water suppliers

    162

 

              (8)             Subsection (5) above applies to guidance revised under subsection

(6) above as it applies to guidance issued under section 66D(4) above.

              (9)             In this section, references to the supply system of a water undertaker

shall be construed in accordance with section 17B(5) above.

              (10)            Where the period for which and terms and conditions on which a

5

water undertaker is to perform any duty under sections 66A to 66C

above are determined in accordance with subsection (2)(b) of section

66D above, they shall have effect as if they had been agreed between

the parties in question (and references in the following provisions of

this Act to an agreement under this section shall be construed

10

accordingly).

       66G Designation of strategic supply

              (1)             Subsection (2) below applies if at any time the Authority determines

that an introduction of water which a water undertaker is required

to permit under section 66B or 66C above in accordance with an

15

agreement under section 66D above constitutes a strategic supply of

water.

              (2)             The Authority shall designate the introduction as a strategic supply.

              (3)             Subsection (4) below applies if—

                    (a)                   a water undertaker requests the Authority to make a

20

determination that an introduction of water constitutes a

strategic supply for the purposes of subsection (1) above, or

                    (b)                   the Authority otherwise proposes to make a determination

that an introduction of water constitutes a strategic supply

for the purposes of that subsection.

25

              (4)             The Authority shall give notice of the request or proposed

determination to—

                    (a)                   the Secretary of State;

                    (b)                   the Assembly;

                    (c)                   the Environment Agency;

30

                    (d)                   the other party or parties, or the parties, to the agreement

under section 66D above; and

                    (e)                   such other persons (if any) as the Authority thinks it

appropriate to notify.

              (5)             Any such notice shall specify the time (not being less than twenty-

35

eight days from the date on which the notice was given) within

which representations or objections with respect to the request or

proposed determination may be made.

              (6)             The Authority shall consider any representations or objections which

are duly made and not withdrawn.

40

              (7)             If the Authority determines that an introduction designated under

this section as a strategic supply no longer constitutes such a supply,

it shall cancel its designation.

              (8)             If the Authority proposes to make a determination under subsection

(7) above that an introduction no longer constitutes a strategic

45

 

 

 
previous section contents continue
 
House of Lords home page Houses of Parliament home page House of Commons home page search page enquiries

© Parliamentary copyright 2003
Revised 30 April 2003