SCHEDULES
SCHEDULE 2

Water undertakers' duties as regards water supply licensees
5
For section 66E of that Act there is substituted—

Rules about charges
66E
1
The Authority must issue rules about charges that may be imposed by a water undertaker under a section 66D agreement.
2
The rules may in particular make provision about—
a
the types of charges that may be imposed;
b
the amount or the maximum amount, or methods for determining the amount or maximum amount, of any type of charge;
c
principles for determining what types of charges may or may not be imposed;
d
principles for determining the amount of any charge that may be imposed;
e
publication of the charges that may be imposed.
3
The rules must include provision for and in connection with requiring a water undertaker to impose on a water supply licensee only such charges as would enable the licensee, where the services it provides to a person under its retail authorisation or restricted retail authorisation are services to which a section 142(2)(b) agreement would apply if the undertaker had continued to provide the services, to charge for those services at the same rate or rates as would have applied if the section 142(2)(b) agreement had applied.
4
In subsection (3) “section 142(2)(b) agreement” means an agreement to which section 142(2)(b) applies.
5
If the Authority considers that a water undertaker is not acting as required by rules under this section, the Authority may—
a
give the undertaker a direction to do, or not to do, a thing specified in the direction, or
b
in a case where a section 66D agreement to which the undertaker is party requires modification in order to conform to the rules, give a direction to the undertaker and the water supply licensee in question to modify the agreement.
6
It is the duty of a water undertaker or a water supply licensee to comply with a direction under subsection (5), and this duty is enforceable by the Authority under section 18.
7
The rules may—
a
make different provision for different persons or descriptions of person;
b
make different provision for different purposes;
c
make provision subject to exceptions.
8
The Authority may from time to time revise rules issued under this section and issue revised rules.
9
The Authority must issue revised rules if—
a
guidance is issued under section 66ED, and
b
the Authority, having regard to that guidance, considers that it is appropriate to revise the rules.
10
Revised rules may include provision for applying any of their revisions to section 66D agreements made before the revised rules come into effect.

Rules about charges: provision about the reduction of charges
66EA
1
Rules under section 66E may make provision about the reduction of charges payable under a section 66D agreement where—
a
a water supply licensee that has a retail authorisation or a restricted retail authorisation is party to the section 66D agreement, and
b
other conditions specified by the rules are satisfied.
2
Rules made by virtue of subsection (1) may in particular—
a
specify conditions relating to any party to the section 66D agreement;
b
specify conditions about persons taking steps for the purpose of reducing or managing water consumption;
c
specify conditions about the premises by reference to which such steps are to be taken;
d
specify conditions about reducing charges payable by a person who—
i
is not party to the section 66D agreement, and
ii
takes or proposes to take such steps as satisfy or would satisfy a condition specified under paragraph (b).
3
The rules may provide that, where a charge falls to be reduced in accordance with rules made by virtue of subsection (1), the water undertaker to which the charges are payable must give notice of that reduction to the Authority.
4
Rules made by virtue of subsection (3) may—
a
make provision as to the content of the notice;
b
specify the period within which an undertaker is to give notice to the Authority.
5
Provision under subsection (4)(a) may in particular require the notice to specify—
a
the amount of the charge, with and without the reduction;
b
the period for which the reduction has effect.

Rules under section 66E: procedure
66EB
1
Before issuing rules under section 66E, the Authority must—
a
prepare a draft of the proposed rules, and
b
consult the relevant persons about the draft.
2
The relevant persons are—
a
the Secretary of State;
b
the Welsh Ministers;
c
the Council;
d
any water undertakers likely to be affected by the rules;
e
any water supply licensees likely to be affected by the rules;
f
such other persons as the Authority thinks appropriate.
3
The Authority must specify the period (“the consultation period”) within which persons may make representations about the proposed rules.
4
The Authority must have regard to guidance issued under section 66ED in preparing rules under section 66E.
5
Before rules under section 66E prepared by the Authority are issued, the Minister may direct the Authority not to issue the rules.
6
In subsection (5) “the Minister” means—
a
the Secretary of State, so far as rules prepared by the Authority relate to section 66D agreements affecting only the supply systems of water undertakers whose areas are wholly or mainly in England;
b
the Welsh Ministers, so far as rules prepared by the Authority relate to section 66D agreements affecting only the supply systems of water undertakers whose areas are wholly or mainly in Wales;
c
the Secretary of State and the Welsh Ministers acting jointly, so far as rules prepared by the Authority relate to section 66D agreements not falling within paragraph (a) or (b).
7
A direction under subsection (5) must be given within the period of 28 days beginning with the day after the end of the consultation period, and rules may not be issued before that period of 28 days has expired.
8
This section is subject to section 66EC.

Rules under section 66E: minor or urgent revisions
66EC
1
This section applies if the Authority proposes to issue revised rules under section 66E and, in the view of the Authority, the revision or each of the revisions proposed to be made is—
a
a revision for which consultation is unnecessary, or
b
a revision that it is necessary or desirable to make without delay.
2
Section 66EB does not apply to the proposed revised rules.
3
Before issuing the revised rules, the Authority must give notice to the Minister of its intention to issue revised rules.
4
Before the revised rules are issued, the Minister may direct the Authority not to issue the revised rules.
5
A direction under subsection (4) must be given within the period of 14 days beginning with the day after the day on which notice is given under subsection (3), and the Authority may not issue the revised rules in question before—
a
that period of 14 days expires, or
b
the Minister notifies the Authority that no direction under subsection (4) will be given in relation to the revised rules,
whichever is the sooner.
6
Once the Authority has issued the revised rules, it must give notice as soon as reasonably practicable of—
a
the issuing of the revised rules, and
b
as regards each revision contained in them, whether in the view of the Authority the revision falls within paragraph (a) or (b) of subsection (1).
7
Notice under subsection (6) is to be given to such persons as the Authority considers appropriate.
8
Unless the Authority gives notice that a revision in revised rules is in the view of the Authority a revision falling within subsection (1)(a), the revision ceases to have effect at the end of the period of six months beginning with the day after that on which the revised rules are issued.
9
In this section “the Minister” has the meaning given by section 66EB.

Rules under section 66E: guidance
66ED
1
The Minister may issue guidance as to the content of rules under section 66E.
2
Before issuing the guidance, the Minister must—
a
prepare a draft of any proposed guidance;
b
consult the relevant persons about the draft.
3
The relevant persons are—
a
the Secretary of State;
b
the Welsh Ministers;
c
such other persons as the Minister thinks appropriate.
4
The Minister may from time to time revise guidance issued under this section and issue revised guidance.
5
Subsections (2) and (3) apply to revised guidance as they apply to the original guidance.
6
The Minister must arrange for the publication of guidance issued under this section.
7
In this section “the Minister” means—
a
the Secretary of State, in relation to section 66D agreements affecting only the supply systems of water undertakers whose areas are wholly or mainly in England;
b
the Welsh Ministers, in relation to section 66D agreements affecting only the supply systems of water undertakers whose areas are wholly or mainly in Wales;
c
the Secretary of State and the Welsh Ministers acting jointly, in relation to section 66D agreements not falling within paragraph (a) or (b).
Sch. 2 para. 5 in force at 1.9.2015 for specified purposes by S.I. 2015/1469, art. 3(d)(ii) (with art. 5(1)(3)(5))
Sch. 2 para. 5 in force at 1.9.2016 for specified purposes by S.I. 2016/465, art. 3(e) (with Sch. 2)
Sch. 2 para. 5 in force at 1.4.2017 in so far as not already in force by S.I. 2017/462, art. 3(i)(iv) (with arts. 6-9)