Water industry charging: guidance to Ofwat

Overview

The Water Act 2014 received Royal Assent on 14th May 2014. It introduces changes in legislation to enable the water and sewerage sectors to deliver increased resilience, improved customer service and to support economic growth. An important aspect of these reforms is that they allow competition to be increased in the non-household retail and upstream parts of the industry.

The Act also sets out a new framework for the regulation of charging in the water industry. This is necessary to ensure that it remains suitable for the industry once the reforms enabled by the Act have been implemented. Under this new framework Ofwat, the independent economic regulator of the water industry, will be able to issue new binding Charging Rules for the water industry. As such, the Act also requires Ministers to develop new Charging Guidance which Ofwat must have regards to in developing their Charging Rules. The purpose of the Charging Guidance is to ensure that Ofwat’s Charging Rules reflect the Government’s policy priorities for the water sector.

Why your views matter

This consultation is on the new Charging Guidance to Ofwat, which the Government is seeking to introduce. It sets out the Government’s objectives for charging in the water industry and outlines how it expects these to be achieved in each of the main charging regimes (household, non-household, retail, upstream and developers). It builds upon the Charging Principles published by Defra in November 2013 during the passage of the Water Bill through Parliament.

We would welcome your views and comments on these proposals. Please read the consultation document before responding.

As an alternative to completing the online survey, you are also welcome to submit your responses by email or post using the contact details below.

Email: 

chargingguidanceteam@defra.gsi.gov.uk

Post:

Defra Water Reform team,
Area 3B, Nobel House
17 Smith Square
London
SW1P 3JR

What happens next

Once this consultation has concluded we will analyse replies and publish a summary of responses. We will then lay the Charging Guidance in Parliament for a period of 40 days. Our intention is that the Guidance will be issued in time to influence the 2016/2017 charging year. Ofwat will also consult on its new Charging Rules this summer.