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Water Services etc. (Scotland) Act 2005

Schedule 3: Certain Pre-Existing Agreements as to Charges

287.Schedule 3, introduced by section 21(6) of the Act, makes provision to preserve the charging arrangements which apply where, before the coming into force of this schedule, Scottish Water have used existing statutory powers to enter into “relevant agreements” with non-household customers for charging (other than through a charges scheme) for services provided under those agreements.  Once the relevant provisions of the Act are commenced, Scottish Water will no longer have the power to enter into such agreements for charging for services provided to customers in exercise of core functions, and any charges will be determined instead according to a charges scheme (under the new section 29A of the 2002 Act) or an authorised departure from a charges scheme (under the new section 29E of the 2002 Act).

Paragraph 1

288.Paragraph 1 defines a “relevant agreement” and a “relevant customer” for the purpose of schedule 3.  These are agreements between Scottish Water and another person in respect of “eligible premises” (as defined in section 27 of the Act) which have been entered into before the coming into force of this schedule by virtue of the statutory powers set out in sub-paragraph (3) or otherwise and which make provision for the relevant customer to pay charges for services provided under those agreements other than by reference to a charges scheme.

289.Sub-paragraph (2) further specifies that, for the purposes of sub-paragraph (1), an agreement between Scottish Water and another person includes an agreement to which Scottish Water has become party in consequence of a transfer of obligations, by virtue of any enactment or contractual arrangements, which includes, for example, obligations which have been entered into by Scottish Water’s statutory predecessors and which have subsequently transferred to Scottish Water. However, it will not include those agreements to which section 47 of the Water (Scotland) Act 1980 applies. Section 47 of the 1980 Act makes provision to preserve certain agreements made between Scottish Water’s statutory predecessors prior to 1949 and their customers, regarding the provision of water supplies free of charge or on other favourable terms, in return for the granting of, for example, way leaves to lay infrastructure.

Paragraph 2

290.Paragraph 2 sets out the arrangements for relevant agreements to be identified and considered by the Commission, in order to assess the relevant charges to be paid by customers under those agreements and to determine the charges which any licensed provider, in respect of such customers, should pay to Scottish Water for services provided under those agreements.

291.Sub-paragraph (1) requires Scottish Water to send details of relevant agreements to the Commission within one month of the schedule coming into force.  Sub-paragraph (2) provides for the Commission to assess, in respect of each agreement sent, the relevant charges which the relevant customer is still entitled to pay under the agreement, and based on this and the costs which any water and sewerage services provider will incur where it provides services to that customer under  the agreement and any other matter the Commission considers appropriate, to determine the  charges which a provider should pay to Scottish Water (as read with sub-paragraph (6)(a)).

292.Sub-paragraph (3) requires the Commission to give each relevant customer written notice of its assessment of the relevant charges payable under the agreement and the amount which Scottish Water will be able to recover from a provider in respect of the customer.  This notice is also to be sent to Scottish Water and every water and sewerage services provider, by such date as the Scottish Ministers may direct.

293.Sub-paragraph (5) sets out the circumstances in which the charging arrangements at sub-paragraph (6) apply. In the case  where a relevant customer is served by a water and sewerage services provider, Scottish Water can recover any charges determined under sub-paragraph (2)(b) from the provider and the provider in turn can charge the relevant customer no more than the amount set out in the relevant agreement.

294.Sub-paragraph (7) provides that Scottish Water should bear the cost of any shortfall between the charges determined under sub-paragraph (2)(b) and any charges determined under a charges scheme.

295.Sub-paragraph (8) provides that where a relevant customer is not or has ceased to be served by a water and sewerage services provider for any reason, Scottish Water should demand and recover directly from the relevant customer no more than the relevant charge as set out in the relevant agreement as assessed under sub-paragraph (2)(a).

Paragraph 3

296.Paragraph 3 makes provision in relation to the status of relevant agreements under this schedule and the application of charges schemes to them. Sub-paragraph (1) disapplies a charges scheme in relation to any services covered by relevant charges determined under this schedule unless the agreement concerned has expired or has been terminated.  Sub-paragraph (2) clarifies that a relevant agreement is not to expire or terminate simply as a result of the change of a water and sewerage services provider in respect of a relevant customer.

297.Sub-paragraph (3) provides that a relevant agreement cannot be renewed on its expiry or termination or extended at any time.

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