Fair Charging Rules for New Water supplies
Ofwat has set out the new Charging Rules, from April 2018, the water companies must use to draw up the pricing arrangements which apply when providing new connection services for developers for water mains and/or public sewers. The water company’s charging arrangements for the cost of providing site specific infrastructure must be published in the form of a single document for developers no later than two months before the period in relation to which they have effect.
The Rules stipulate a number of requirements for the charging arrangements, including the need to explain how each charge has been calculated in a clear and accessible manner. The charges covered by the Rules must also be set out in such a way that developers or other customers can confidently work out a reasonable estimate of the costs payable providing the relevant parameters of a development are known.
The water companies must provide a reasonable choice of times and methods of payment of the costs and set these out in the Charging Arrangement Documents. Under the Rules the charges must not relate to work needed to modify or enhance existing network infrastructure in order to address pre-existing deficiencies or to enhance network flexibility, either in capacity or capability, which are unrelated to the proposed new connection services.
The water firms are allowed to require payment of a security prior to commencing work, the type and amount of this should not be unduly onerous taking into account the risk to be borne by the company in carrying out the work in question.
The types and the amount of any charges must be formulated in accordance with the Ofwat principles that reflect:
- fairness and affordability;
- environmental protection;
- stability and predictability; and
- transparency and customer-focused service.
Charging Arrangements must be published at least once in every year from April 2018 onwards.
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