Part 1

Water industry
CHAPTER 2

Water and sewerage undertakers

Arrangements between relevant undertakers

Main connections into sewerage systems
9
1
For section 110A of the Water Industry Act 1991 (new connections with public sewers) there is substituted—

Main connections
110A
1
This section applies where—
a
a qualifying person requests a sewerage undertaker to permit a main connection into the established undertaker's sewerage system for the benefit of the qualifying person, or
b
a sewerage undertaker proposes such an arrangement;
and references in this section to the established undertaker are references to the sewerage undertaker who is to permit the main connection.
2
In this section “qualifying person” means—
a
a sewerage undertaker, or
b
a person who has made an application for an appointment or variation under section 8 which has not been determined.
3
On the application of the qualifying person or the established undertaker, the Authority may—
a
if it appears to the Authority that it is necessary or expedient for the purposes of this Part that the established undertaker should permit a main connection into its sewerage system, and
b
if the Authority is satisfied that the established undertaker and qualifying person cannot reach agreement,
by order require the established undertaker to permit the connection for such period and on such terms and conditions as may be specified in the order.
4
Before making an order under subsection (3), the Authority must consult the appropriate agency.
5
Subject to subsection (6), an order under subsection (3) has effect as an agreement between the established undertaker and the qualifying person.
6
If the Authority makes an order under subsection (3) on the application of a person who is a qualifying person by virtue of subsection (2)(b), the Authority must frame the order so that it does not have effect until—
a
the person becomes a sewerage undertaker for the area specified in the order, or
b
the person becomes a sewerage undertaker for an area that includes the area specified in the order (in the case of a sewerage undertaker applying for a variation).
7
Neither the CMA nor the Authority may exercise, in respect of an agreement with a sewerage undertaker for it to permit a main connection into its sewerage system for the benefit of a qualifying person, the powers conferred by—
a
section 32 of the Competition Act 1998 (directions in relation to agreements);
b
section 35(2) of that Act (interim directions).
8
Subsection (7)(b) does not apply to the exercise of powers in respect of conduct—
a
which is connected with such agreement as is mentioned in subsection (7), and
b
in respect of which section 35(1) of the Competition Act 1998 applies because of an investigation under section 25 of that Act relating to a suspected infringement of the Chapter 2 prohibition imposed by section 18(1) of that Act.
9
In exercising its functions under this section, the Authority must have regard to the desirability of—
a
facilitating effective competition within the sewerage services industry;
b
the established undertaker's recovering the expenses of complying with its obligations by virtue of this section and securing a reasonable return on its capital;
c
the established undertaker's being able to meet its existing obligations, and likely future obligations, to provide sewerage services without having to incur unreasonable expenditure in carrying out works;
d
not putting at risk the ability of the established undertaker to meet its existing obligations, or likely future obligations, to provide such services.
10
In this section and section 110B “the appropriate agency”, in relation to a determination whether to make an order under subsection (3) or section 110B(1) which would result in, or which would vary or terminate, a main connection agreement, means—
a
the Environment Agency, in a case where all parties to the main connection agreement are or would be—
i
a sewerage undertaker whose area is wholly in England, or
ii
a person who would, if the person's application for an appointment or variation is determined in accordance with the application, be such a sewerage undertaker;
b
the NRBW, in a case where all parties to the main connection agreement are or would be—
i
a sewerage undertaker whose area is wholly in Wales, or
ii
a person who would, if the person's application for an appointment or variation is determined in accordance with the application, be such a sewerage undertaker;
c
both the Environment Agency and the NRBW, in any other case.
11
In this section and sections 110B to 110J—
- “main connection” means—
  1. a connection between a sewer or disposal main and a sewer or disposal main, or
  2. a connection which allows a sewer or disposal main to discharge directly into a sewage disposal works;
- “main connection agreement” means an agreement with one or more sewerage undertakers for that undertaker or each of them to permit a main connection into its sewerage system and includes—
  1. an order under subsection (3) which is deemed to be an agreement by virtue of subsection (5), and
  2. any agreement which has been varied by order under section 110B(1).

Variation and termination of main connection agreements
110B
1
On the application of any party to a main connection agreement, the Authority may—
a
if it appears to the Authority that it is necessary or expedient for the purpose of this Part that the main connection agreement should be varied or terminated, and
b
if the Authority is satisfied that variation or termination cannot be achieved by agreement,
by order vary or terminate the main connection agreement.
2
Before making an order under subsection (1), the Authority must consult the appropriate agency.
3
If an order under subsection (1) is made in relation to a main connection agreement, the agreement—
a
has effect subject to the provision made by the order, or
b
ceases to have effect (as the case may be).
4
An order under subsection (1) may require any party to the agreement to pay compensation to any other party.
5
Neither the CMA nor the Authority may exercise, in respect of an agreement to vary or terminate a main connection agreement, the powers conferred by—
a
section 32 of the Competition Act 1998 (directions in relation to agreements);
b
section 35(2) of that Act (interim directions).
6
Subsection (5)(b) does not apply to the exercise of powers in respect of conduct—
a
which is connected with an agreement to vary or terminate a main connection agreement, and
b
in respect of which section 35(1) of the Competition Act 1998 applies because of an investigation under section 25 of that Act relating to a suspected infringement of the Chapter 2 prohibition imposed by section 18(1) of that Act.
7
In exercising its functions under this section, the Authority must have regard to the expenses incurred by the established undertaker in complying with its obligations under the main connection agreement in question and to the desirability of—
a
facilitating effective competition within the sewerage services industry;
b
the established undertaker's recovering the expenses of complying with its obligations by virtue of this section and securing a reasonable return on its capital;
c
the established undertaker's being able to meet its existing obligations, and likely future obligations, to provide sewerage services without having to incur unreasonable expenditure in carrying out works;
d
not putting at risk the ability of the established undertaker to meet its existing obligations, or likely future obligations, to provide such services.
8
In this section and sections 110C to 110J “established undertaker”, in relation to a sewerage agreement, means the sewerage undertaker which is required by the agreement to permit a main connection into its sewerage system.

Codes in respect of main connection agreements
110C
1
The Authority may issue one or more codes in respect of main connection agreements.
2
A code may make provision about—
a
procedures in connection with making an agreement to permit a main connection into a sewerage undertaker's sewerage system;
b
procedures in connection with varying or terminating a main connection agreement;
c
procedures to be followed by the Authority in determining whether to make an order under section 110A(3) or 110B(1);
d
the terms and conditions of a main connection agreement, including terms as to the duration of such an agreement;
e
principles for determining the terms and conditions that should or should not be incorporated into a main connection agreement;
f
the steps to be taken by the Authority in determining whether a person is complying with the code.
3
If the Authority considers that a sewerage undertaker is not acting as required by a code, the Authority may give the undertaker a direction to do, or not to do, a particular thing specified in the direction.
4
The Authority may not give a direction under subsection (3) requiring a person to enter into, vary or terminate an agreement.
5
It is the duty of a sewerage undertaker to comply with a direction under subsection (3), and this duty is enforceable by the Authority under section 18.
6
A code may make different provision for different persons or different descriptions of person.
7
The Authority may from time to time revise a code issued under this section and issue a revised code.
8
A revised code may include provision for applying any of its revisions to main connection agreements made before the revised code comes into force.

Codes under section 110C: procedure
110D
1
Before issuing a code under section 110C, the Authority must—
a
prepare a draft of the proposed code under section 110C, and
b
consult such persons about the proposed code as it considers appropriate.
2
The Authority must specify the period (“the consultation period”) within which a person may make representations about the proposed code.
3
Before a code under section 110C prepared by the Authority is issued, the Minister may direct the Authority—
a
not to issue the code, or
b
to issue the code with specified modifications.
4
Subsection (3) is subject to subsections (6) and (7).
5
In subsection (3) “the Minister” means—
a
the Secretary of State, so far as a code prepared by the Authority relates to main connection agreements under which—
i
the main connection into a sewerage system, or
ii
each such connection,
is or would be a main connection into the sewerage system of a sewerage undertaker whose area is wholly or mainly in England for the benefit of another such undertaker;
b
the Welsh Ministers, so far as a code prepared by the Authority relates to main connection agreements under which—
i
the main connection into a sewerage system, or
ii
each such connection,
is or would be a main connection into the sewerage system of a sewerage undertaker whose area is wholly or mainly in Wales for the benefit of another such undertaker;
c
the Secretary of State and the Welsh Ministers acting jointly, so far as a code prepared by the Authority relates to main connection agreements under which one main connection into a sewerage system is or would be—
i
a main connection into the sewerage system of a sewerage undertaker whose area is wholly or mainly in England for the benefit of a sewerage undertaker whose area is wholly or mainly in Wales, or
ii
a main connection into the sewerage system of a sewerage undertaker whose area is wholly or mainly in Wales for the benefit of a sewerage undertaker whose area is wholly or mainly in England.
6
If the power under subsection (3) is exercised to give a direction in respect of such main connection agreements as are referred to in paragraph (a), (b) or (c) of subsection (5), it may not be exercised again in respect of such main connection agreements as are referred to in that paragraph.
7
If the power under subsection (3) to give a direction in respect of such main connection agreements as are referred to in paragraph (a), (b) or (c) of subsection (5) is not exercised on the first occasion on which it may be so exercised, it may not be exercised in respect of such main connection agreements as are referred to in that paragraph on a later occasion.
8
A direction under subsection (3) must be given within the period of 28 days beginning with the day after the end of the consultation period, and a code in relation to which a direction may be given may not be issued before that period of 28 days has expired.

Codes under section 110C: minor or urgent revisions
110E
1
This section applies if the Authority propose to issue a revised code under section 110C 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 110D does not apply to the revised code.
3
Once the Authority has issued the revised code, it must give notice as soon as reasonably practicable of—
a
the issuing of the revised code, and
b
as regards each revision contained in it, whether in the view of the Authority the revision falls within paragraph (a) or (b) of subsection (1).
4
Notice under subsection (3) is to be given to such persons as the Authority considers appropriate.
5
Unless the Authority gives notice that a revision in a revised code 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 code is issued.

Rules about charges for permitting main connections
110F
1
The Authority may issue rules about charges that may be imposed by a sewerage undertaker under a main connection agreement.
2
The rules may in particular make provision about—
a
what types of charge may be imposed;
b
the amount or the maximum amount, or a method for determining the amount or maximum amount, of any type of charge;
c
principles for determining what types of charge 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
If the Authority considers that a sewerage undertaker is not acting as required by rules under this section, the Authority may give the undertaker a direction to do, or not to do, a particular thing specified in the direction.
4
It is the duty of a sewerage undertaker to comply with a direction under subsection (3), and this duty is enforceable by the Authority under section 18.
5
The rules may—
a
make different provision for different sewerage undertakers or different descriptions of sewerage undertaker;
b
make different provision for different purposes;
c
make provision subject to exceptions.
6
The Authority may from time to time revise rules issued under this section and issue revised rules.
7
The Authority must issue revised rules if—
a
guidance is issued under section 110J, and
b
the Authority, having regard to that guidance, considers that it is appropriate to revise the rules.
8
Revised rules may include provision for applying any of the revisions to main connection agreements made before the revised rules come into effect.

Rules under section 110F: provision about the reduction of charges
110G
1
Rules under section 110F may provide for the reduction of charges payable under a main connection agreement where conditions specified by the rules are satisfied.
2
Rules made by virtue of subsection (1) may in particular—
a
specify conditions by reference to any party to a main connection agreement;
b
require that steps be taken for the purpose of reducing the cost to a sewerage undertaker of permitting a main connection into its sewerage system;
c
specify conditions about reducing charges payable by a person who—
i
is not party to the agreement, and
ii
takes or proposes to take such steps as satisfy or would satisfy a condition falling within 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 sewerage 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 provision of the rules that brings about the reduction in the charge;
b
the amount of the charge, with and without the reduction;
c
the period for which the reduction has effect.

Rules under section 110F: procedure
110H
1
Before issuing rules under section 110F, the Authority must—
a
prepare a draft of the proposed rules, and
b
consult such persons about the proposed rules as it thinks appropriate.
2
The Authority must specify the period (“the consultation period”) within which persons may make representations about the proposed rules.
3
The Authority must have regard to guidance issued under section 110J in making rules under section 110F.
4
Before rules under section 110F prepared by the Authority are issued, the Minister may direct the Authority not to issue the rules.
5
In subsection (4) “the Minister” means—
a
the Secretary of State, so far as rules prepared by the Authority relate to main connection agreements under which—
i
the main connection into a sewerage system, or
ii
each such connection,
is or would be a main connection into the sewerage system of a sewerage undertaker whose area is wholly or mainly in England for the benefit of another such undertaker;
b
the Welsh Ministers, so far as rules prepared by the Authority relate to main connection agreements under which—
i
the main connection into a sewerage system, or
ii
each such connection,
is or would be a main connection into the sewerage system of a sewerage undertaker whose area is wholly or mainly in Wales for the benefit of another such undertaker;
c
the Secretary of State and the Welsh Ministers acting jointly, so far as rules prepared by the Authority relate to main connection agreements under which one main connection into a sewerage system is or would be—
i
a main connection into the sewerage system of a sewerage undertaker whose area is wholly or mainly in England for the benefit of a sewerage undertaker whose area is wholly or mainly in Wales, or
ii
a main connection into the sewerage system of a sewerage undertaker whose area is wholly or mainly in Wales for the benefit of a sewerage undertaker whose area is wholly or mainly in England.
6
A direction under subsection (4) 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.
7
This section is subject to section 110I.

Rules under section 110F: minor or urgent revisions
110I
1
This section applies if the Authority proposes to issue revised rules under section 110F 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 110H 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 110H.

Rules under section 110F: guidance
110J
1
The Minister may issue guidance as to the content of rules under section 110F.
2
Before issuing the guidance, the Minister must—
a
prepare a draft of the proposed guidance;
b
consult the relevant persons about the draft.
3
The relevant persons are—
a
the Welsh Ministers;
b
the Secretary of State;
c
such other persons as the Minister thinks appropriate.
4
The Minister may from time to time revise the guidance 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 main connection agreements under which—
i
any main connection into a sewerage system, or
ii
each such connection,
is or would be a main connection into the sewerage system of a sewerage undertaker whose area is wholly or mainly in England for the benefit of another such undertaker;
b
the Welsh Ministers, in relation to main connection agreements under which—
i
any main connection into a sewerage system, or
ii
each such connection,
is or would be a main connection into the sewerage system of a sewerage undertaker whose area is wholly or mainly in Wales for the benefit of another such undertaker;
c
the Secretary of State and the Welsh Ministers acting jointly, in relation to main connection agreements under which one main connection into a sewerage system is or would be—
i
a main connection into the sewerage system of a sewerage undertaker whose area is wholly or mainly in England for the benefit of a sewerage undertaker whose area is wholly or mainly in Wales, or
ii
a main connection into the sewerage system of a sewerage undertaker whose area is wholly or mainly in Wales for the benefit of a sewerage undertaker whose area is wholly or mainly in England.
2
In sections 110B to 110J of the Water Industry Act 1991 (as substituted by subsection (1))—
a
a reference to a main connection agreement includes a reference to an old main connection agreement, and
b
a reference to an established undertaker, in relation to a main connection agreement, is to be construed accordingly.
3
For the purposes of subsection (2)—
a
“old main connection agreement” means an agreement made before the coming into force of subsection (1) that is an agreement with one or more sewerage undertakers for that undertaker or each of them to permit a main connection into its sewerage system, and includes an order under old section 110A which is deemed to be an agreement by virtue of old section 110A(5);
b
references to old section 110A are references to section 110A, as that section had effect before being substituted under subsection (1).
S. 9(1) in force at 1.11.2016 for specified purposes by S.I. 2016/1007, art. 2(c)(i)
S. 9(2)(3) in force at 1.11.2016 for specified purposes by S.I. 2016/1007, art. 2(c)(ii)
S. 9 in force at 1.4.2018 for specified purposes for E. by S.I. 2018/397, art. 2(b)
S. 9 in force at 1.4.2019 for W. in so far as not already in force by S.I. 2017/1288, art. 3(b)