Water Industry Act 1991

Part I — PRELIMINARY

The Director General of Water Services

The Director General of Water Services.

1

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Water Services Regulation Authority

1A

• (1) There shall be a body corporate to be known as the Water Services Regulation Authority (in this Act referred to as “the Authority”) for the purpose of carrying out the functions conferred on or transferred to it by this Act or under or by virtue of any other enactment.

• (2) The functions of the Authority are performed on behalf of the Crown.

• (3) Schedule 1A to this Act shall have effect with respect to the Authority.

• (4) In Welsh the Authority may be known as “Awdurdod Rheoleiddio Gwasanaethau Dŵr”.

General duties

General duties with respect to water industry.

2

• (1) This section shall have effect for imposing duties on the Secretary of State and on the Authority as to when and how they should exercise and perform the powers and duties conferred or imposed on the Secretary of State or the Authority by virtue of any of the relevant provisions.

• (2A) The Secretary of State or, as the case may be, the Authority shall exercise and perform the powers and duties mentioned in subsection (1) above in the manner which he or it considers is best calculated—

• (a) to further the consumer objective;

• (b) to secure that the functions of a water undertaker and of a sewerage undertaker are properly carried out as respects every area of England and Wales;

• (c) to secure that companies holding appointments under Chapter 1 of Part 2 of this Act as relevant undertakers are able (in particular, by securing reasonable returns on their capital) to finance the proper carrying out of those functions; ...

• (d) to secure that the activities authorised by the licence of a water supply licensee or sewerage licensee and any statutory functions imposed on it in consequence of the licence are properly carried out ; and

• (e) to further the resilience objective.

• (2B) The consumer objective mentioned in subsection (2A)(a) above is to protect the interests of consumers, wherever appropriate by promoting effective competition between persons engaged in, or in commercial activities connected with, the provision of water and sewerage services.

• (2C) For the purposes of subsection (2A)(a) above the Secretary of State or, as the case may be, the Authority shall have regard to the interests of—

• (a) individuals who are disabled or chronically sick;

• (b) individuals of pensionable age;

• (c) individuals with low incomes;

• (d) individuals residing in rural areas; ...

• (e) customers, of companies holding an appointment under Chapter 1 of Part 2 of this Act, whose premises are household premises (as defined in section 17C) ; and

• (f) customers, of companies holding an appointment under Chapter 1 of Part 2 of this Act, whose premises are below the consumption threshold and in the area of a relevant undertaker whose area is wholly or mainly in Wales,

but that is not to be taken as implying that regard may not be had to the interests of other descriptions of consumer.

• (2D) For the purposes of subsection (2C) above, premises are below the consumption threshold if the total quantity of water estimated to be supplied to the premises annually for the purposes of subsection (2) of section 17D below is less than the quantity specified in that subsection.

• (2DA) The resilience objective mentioned in subsection (2A)(e) is—

• (a) to secure the long-term resilience of water undertakers' supply systems and sewerage undertakers' sewerage systems as regards environmental pressures, population growth and changes in consumer behaviour, and

• (b) to secure that undertakers take steps for the purpose of enabling them to meet, in the long term, the need for the supply of water and the provision of sewerage services to consumers,

including by promoting—

• (i) appropriate long-term planning and investment by relevant undertakers, and

• (ii) the taking by them of a range of measures to manage water resources in sustainable ways, and to increase efficiency in the use of water and reduce demand for water so as to reduce pressure on water resources.

• (2DB) For the purposes of subsection (2DA)—

• (a) the reference to water undertakers' supply systems is to be construed in accordance with section 17B;

• (b) the reference to sewerage undertakers' sewerage systems is to be construed in accordance with section 17BA(7).

• (2E) The Secretary of State and the Authority may, in exercising any of the powers and performing any of the duties mentioned in subsection (1) above, have regard to—

• (a) any interests of consumers in relation to electricity conveyed by distribution systems (within the meaning of the Electricity Act 1989);

• (b) any interests of consumers in relation to gas conveyed through pipes (within the meaning of the Gas Act 1986);

• (c) any interests of consumers in relation to communications services and electronic communications apparatus (within the meaning of the Communications Act 2003),

which are affected by the exercise of that power or the performance of that duty.

• (3) Subject to subsection (2A) above, the Secretary of State or, as the case may be, the Authority shall exercise and perform the powers and duties mentioned in subsection (1) above in the manner which he or it considers is best calculated—

• (a) to promote economy and efficiency on the part of companies holding an appointment under Chapter 1 of Part 2 of this Act in the carrying out of the functions of a relevant undertaker;

• (b) to secure that no undue preference is shown, and that there is no undue discrimination in the fixing by such companies of water and drainage charges;

• (ba) to secure that no undue preference (including for itself) is shown, and that there is no undue discrimination, in the doing by such a company of—

• (i) such things as relate to the provision of services by itself or another such company, or

• (ii) such things as relate to the provision of services by a water supply licensee or a sewerage licensee;

• (c) to secure that consumers are protected as respects benefits that could be secured for them by the application in a particular manner of any of the proceeds of any disposal (whenever made) of any of such a company’s protected land or of an interest or right in or over any of that land;

• (d) to ensure that consumers are also protected as respects any activities of such a company which are not attributable to the exercise of functions of a relevant undertaker, or as respects any activities of any person appearing to the Secretary of State or (as the case may be) the Authority to be connected with the company, and in particular by ensuring—

• (i) that any transactions are carried out at arm’s length;

• (ii) that the company, in relation to the exercise of its functions as a relevant undertaker, maintains and presents accounts in a suitable form and manner;

• (iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (e) to contribute to the achievement of sustainable development.

• (4) In exercising any of the powers or performing any of the duties mentioned in subsection (1) above in accordance with the preceding provisions of this section, the Secretary of State and the Authority shall have regard to the principles of best regulatory practice (including the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed).

• (5) In this section the references to water and drainage charges are references to—

• (a) any charges in respect of any services provided in the course of the carrying out of the functions of a relevant undertaker; and

• (b) amounts of any other description which such an undertaker is authorised by or under any enactment to require any of its customers or potential customers to pay.

• (5A) In this section—

• “consumers” includes both existing and future consumers; and

• “the interests of consumers” means the interests of consumers in relation to—the supply of water by means of a water undertaker’s supply system to premises either by water undertakers or by water supply licensees acting in their capacity as such; andthe provision of sewerage services either by sewerage undertakers or by sewerage licensees acting in their capacity as such.

• (6) For the purposes of this section—

• (a) subject to subsection (6A) below, the reference in subsection (1) above to the relevant provisions is a reference to the provisions contained in—

• (i) Part 2 of this Act (except section 27A and Schedule 3A),

• (ii) any of sections 37A to 38, 38ZA, 39, 39ZA, 39B to 39D, 40E to 40J, 42, 51CD to 51CG, 63AC to 63AF, 66B, 66CA to 66H, 66K, 66L, 66O(2), 95, 95ZA, 96, 96ZA, 99, 105ZF to 105ZI, 110F to 110J, 110L to 110O, 117E to 117O, 117R, 117S, 143B to 143E, 144ZA to 144ZF, 153, 181, 182, 185, 192A, 192B, 195, 195A and 201 to 203 below, and

• (iii) any of sections 42 to 54 of the Water Act 2014.

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (6A) Subsections (2A) to (4) above and sections 2A and 2B below do not apply in relation to anything done by the Authority in the exercise of functions assigned to it by section 31(3) below (“Competition Act functions”).

• (6B) The Authority may nevertheless, when exercising any Competition Act function, have regard to any matter in respect of which a duty is imposed by any of subsections (2A) to (4) above and sections 2A and 2B below, if it is a matter to which the CMA could have regard when exercising that function.

• (7) The duties imposed by subsections (2A) to (4) above and sections 2A and 2B below do not affect the obligation of the Authority or, as the case may be, the Secretary of State to perform or comply with any other duty or requirement (whether arising under this Act or another enactment, by virtue of any assimilated obligation or otherwise).

Strategic priorities and objectives: England

2A

• (1) The Secretary of State may from time to time publish a statement setting out strategic priorities and objectives for the Authority in carrying out relevant functions relating wholly or mainly to England.

• (2) The Authority must carry out those functions in accordance with any statement published under this section.

• (3) In formulating a statement under this section, the Secretary of State—

• (a) must have regard to the duties imposed on the Authority under section 2,

• (b) must have regard to social and environmental matters, and

• (c) may have regard to such other matters as the Secretary of State thinks fit.

• (4) Before publishing a statement under this section, the Secretary of State must consult—

• (a) the Authority,

• (b) the Council,

• (c) relevant undertakers,

• (d) water supply licensees and sewerage licensees,

• (e) the Environment Agency,

• (f) the Welsh Ministers,

• (g) the NRBW, and

• (h) anyone else the Secretary of State thinks appropriate.

• (5) Before publishing a statement under this section the Secretary of State must—

• (a) lay a draft of the statement before Parliament, and

• (b) then wait until the end of the 40-day period.

• (6) The Secretary of State may not publish the statement under this section if, within the 40-day period, either House of Parliament resolves not to approve it.

• (7) “The 40-day period” means the period of 40 days beginning with the day on which the draft is laid before Parliament (or, if it is not laid before each House on the same day, the later of the days on which it is laid).

• (8) When calculating the 40-day period, ignore any period during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than 4 days.

• (9) In this section “relevant functions relating wholly or mainly to England” means the functions mentioned in section 2(1) so far as they relate to appointment areas wholly or mainly in England.

• (10) In subsection (9) “appointment area” means an area for which an appointment is held under Chapter 1 of Part 2.

Strategic priorities and objectives: Wales

2B

• (1) The Welsh Ministers may from time to time publish a statement setting out strategic priorities and objectives for the Authority in carrying out relevant functions relating wholly or mainly to Wales.

• (2) The Authority must carry out those functions in accordance with any statement published under this section.

• (3) In formulating a statement under this section the Welsh Ministers—

• (a) must have regard to the duties imposed on the Authority under section 2,

• (b) must have regard to social and environmental matters, and

• (c) may have regard to such other matters as the Welsh Ministers think fit.

• (4) Before publishing a statement under this section, the Welsh Ministers must consult—

• (a) the Authority,

• (b) the Council,

• (c) relevant undertakers,

• (d) water supply licensees,

• (e) the NRBW,

• (f) the Secretary of State,

• (g) the Environment Agency, and

• (h) anyone else the Welsh Ministers think appropriate.

• (5) Before publishing a statement under this section the Welsh Ministers must—

• (a) lay a draft of the statement before the Assembly, and

• (b) then wait until the end of the 40-day period.

• (6) The Welsh Ministers may not publish the statement under this section if, within the 40-day period, the Assembly resolves not to approve it.

• (7) “The 40-day period” means the period of 40 days beginning with the day on which the draft is laid before the Assembly.

• (8) When calculating the 40-day period, ignore any period during which the Assembly is dissolved or is in recess for more than 4 days.

• (9) In this section “relevant functions relating wholly or mainly to Wales” means the functions mentioned in section 2(1) so far as they relate to appointment areas wholly or mainly in Wales.

• (10) In subsection (9) “appointment area” means an area for which an appointment is held under Chapter 1 of Part 2.

General environmental and recreational duties.

3

• (1) It shall be the duty of each of the following, that is to say—

• (a) the Secretary of State;

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) the Authority; and

• (d) every company holding an appointment as a relevant undertaker,

in formulating or considering any proposals relating to any functions of a relevant undertaker (including, in the case of such a company, any functions which, by virtue of that appointment, are functions of the company itself) to comply with the requirements imposed in relation to the proposals by subsections (2) and (3) below.

• (2) The requirements imposed by this subsection in relation to any such proposals as are mentioned in subsection (1) above are—

• (a) a requirement, so far as may be consistent—

• (i) with the purposes of any enactment relating to the functions of the undertaker; and

• (ii) in the case of the Secretary of State and the Authority, with their duties under section 2 above,

so to exercise any power conferred with respect to the proposals on the person subject to the requirement as to further the conservation and enhancement of natural beauty and the conservation of flora, fauna and geological or physiographical features of special interest and, in the case of the exercise of such a power by a company holding an appointment as a relevant undertaker, as to further water conservation ;

• (b) a requirement to have regard to the desirability of protecting and conserving buildings, sites and objects of archaeological, architectural or historic interest; and

• (c) a requirement to take into account any effect which the proposals would have on the beauty or amenity of any rural or urban area or on any such flora, fauna, features, buildings, sites or objects.

• (3) The requirements imposed by this subsection in relation to any such proposals as are mentioned in subsection (1) above are, subject to the requirements imposed by subsection (2) above—

• (a) a requirement to have regard to the desirability of preserving for the public any freedom of access to areas of woodland, mountains, moor, heath, down, cliff or foreshore and other places of natural beauty;

• (b) a requirement to have regard to the desirability of maintaining the availability to the public of any facility for visiting or inspecting any building, site or object of archaeological, architectural or historic interest; and

• (c) a requirement to take into account any effect which the proposals would have on any such freedom of access or on the availability of any such facility.

• (4) Subsections (1) to (3) above shall apply so as to impose duties on the Authority and any company holding an appointment as a relevant undertaker in relation to any proposal relating to—

• (a) the functions of the Environment Agency; ...

• (aa) the functions of the NRBW; or

• (b) the functions of an internal drainage board,

as they apply in relation to any proposals relating to the functions of such an undertaker; and for the purposes of this subsection the reference in subsection (2)(a) above to the functions of the undertaker shall have effect as a reference to the functions of the Environment Agency , the NRBW, or, as the case may be, of the internal drainage board in question.