Water Act 2003 (c. 37)

(The document as of February, 2008)

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SCHEDULE 3 Further provisions about transfers of functions, property etc

Preliminary

1 In this Schedule--

"transfer" means--
(a)
a transfer of functions under section 36 to the Authority, or
(b)
a transfer of property, rights and liabilities to the Authority or to the Council under section 36, and
"transfer scheme" means a transfer scheme under section 36.

Contents of transfer schemes

2 (1) The property, rights and liabilities which may be transferred by a transfer scheme include property, rights and liabilities that would not otherwise be capable of being transferred or assigned.

(2) The transfers authorised by sub-paragraph (1) include transfers which are to take effect as if there were no such contravention, liability or interference with any interest or right as there would otherwise be by reason of any provision having effect (whether under any enactment or agreement or otherwise) in relation to the terms on which the transferor is entitled to the property or right, or subject to the liability, in question.

3 A transfer scheme may define the property, rights and liabilities to be transferred by specifying them or describing them or by referring to all (or all except anything specified or described) of the property, rights and liabilities comprised in a specified part of the undertaking of the transferor (or partly in one way and partly in the other).

4 A transfer scheme may include such supplementary, incidental, transitional and consequential provision as the Secretary of State considers appropriate.

Modification of transfer scheme after appointed day

5 (1) If, after the day appointed by a transfer scheme, the transferor and transferee so agree in writing, the scheme shall for all purposes be deemed to have come into force on that day with such modifications as may be agreed.

(2) An agreement under this paragraph may, in connection with giving effect to modifications to the scheme, include incidental, supplemental, consequential and transitional provision.

(3) In this paragraph, "modifications" includes additions, alterations and omissions.

Effect of transfers

6 (1) Anything done by the transferor for the purpose of or in connection with anything transferred which is in effect immediately before it is transferred shall be treated as if done by the transferee.

(2) A transfer does not affect the validity of anything done by or in relation to the transferor before the transfer takes effect.

7 There may be continued by or in relation to the transferee anything (including legal proceedings) relating to anything transferred which is in the process of being done by or in relation to the transferor immediately before it is transferred.

8 The transferee shall be substituted for the transferor in any document relating to anything transferred.

Continuity of employment, etc of transferred employees

9 Where a person employed in the civil service of the state becomes an employee of the Council under a transfer scheme, his period of employment in that service counts as a period of employment with the Council for the purposes of the Employment Rights Act 1996 (c. 18) (and the change of employer does not break the continuity of the period of employment for those purposes).

Section 56

SCHEDULE 4 Licensing of water suppliers

1 The WIA is amended as follows.

2 After Chapter 1 of Part 2 of the WIA there is inserted--

" Chapter 1A Licensing of water suppliers

Granting of licences

17A Licensing of water suppliers

(1) Subject to the following provisions of this Chapter--

(a) the Secretary of State; or

(b) with the consent of or in accordance with a general authorisation given by the Secretary of State (after consulting the Assembly), the Authority,

may grant to a company a licence (a "water supply licence") giving it the retail authorisation referred to in subsection (2) below, or both that and the supplementary authorisation referred to in subsection (5) below.

(2) The retail authorisation is an authorisation to the company to use a water undertaker's supply system for the purpose of supplying water to the premises of customers of the company (subject to subsection (3) below) in accordance with Chapter 2A of Part 3 of this Act.

(3) The following requirements must be satisfied in relation to each of the premises supplied by the company--

(a) the requirement that the premises are not household premises (as defined in section 17C below);

(b) the threshold requirement (construed in accordance with section 17D below); and

(c) the requirement that the premises are not being supplied with water by another company pursuant to a water supply licence,

and those requirements shall be enforceable under section 18 below by the Authority.

(4) A water supply licence which gives a company only the retail authorisation is referred to in this Chapter as a "retail licence".

(5) The supplementary authorisation is an authorisation to the company to introduce water into a water undertaker's supply system, by means of which any particular supply of water in accordance with the retail authorisation is to take place, in connection with that supply and in accordance with Chapter 2A of Part 3 of this Act.

(6) A water supply licence which gives a company also the supplementary authorisation is referred to in this Chapter as a "combined licence".

(7) Before granting a combined licence--

(a) the Secretary of State shall consult the Assembly; and

(b) the Authority shall consult the Secretary of State and the Assembly.

(8) A water supply licence shall not be granted to a company unless--

(a) it is a limited company; and

(b) it is not a relevant undertaker.

(9) The Authority may, with the approval of the Secretary of State, issue guidance as to the factors which are, or are not, to be taken into account in determining the extent of any premises for the purposes of subsection (3) above.

(10) Before giving his approval to any guidance issued under subsection (9) above, the Secretary of State shall consult the Assembly.

17B Section 17A: supplementary

(1) The Authority shall publish guidance issued under section 17A(9) above in such manner as the Authority considers appropriate for the purpose of bringing it to the attention of persons likely to be affected by it.

(2) The Authority may, with the approval of the Secretary of State, revise the guidance so issued.

(3) Before giving his approval to guidance revised under subsection (2) above, the Secretary of State shall consult the Assembly.

(4) Subsection (1) above applies to guidance revised under subsection (2) above as it applies to guidance issued under section 17A(9) above.

(5) In this Chapter, references to the supply system of a water undertaker are to the system comprising the following--

(a) any water mains and other pipes which it is the water undertaker's duty to develop and maintain by virtue of section 37 below and which are used for the purpose of conveying water from the undertaker's treatment works to the premises of customers; and

(b) any water mains and other pipes which--

(i) are used by the undertaker for the purpose of conveying non-domestic water from any of its sources to the premises of customers; and

(ii) are not connected to any water mains or pipes falling within paragraph (a) above or to any water mains or other pipes connected to the treatment works mentioned in that paragraph (whether directly or indirectly),

and in sub-paragraph (i) above the reference to non-domestic water is to water supplied other than for domestic or food production purposes.

(6) In subsection (5)(a) above, the reference to treatment works is a reference to the works designated from time to time by the Secretary of State as treatment works for the purposes of this subsection.

(7) Before designating any works for the purposes of subsection (6) above, the Secretary of State shall consult the Assembly.

(8) A list of any works designated for the purposes of subsection (6) above shall be published from time to time by the Secretary of State in such manner as he considers appropriate for the purpose of bringing the designations to the attention of persons likely to be affected by them.

(9) References in this Act to a licensed water supplier are references to a company which is the holder for the time being of a water supply licence.

17C Meaning of household premises

(1) For the purposes of section 17A(3)(a) above, "household premises" means premises in which, or in any part of which, a person has his home.

(2) The fact that a person has his home in, or in part of, any premises does not mean that the premises are household premises unless the principal use of the premises is as a home.

(3) The Secretary of State may by regulations make provision as to--

(a) the circumstances in which a person is or is not to be treated as having his home in, or in part of, any premises for the purposes of this section; and

(b) the factors which are, or are not, to be taken into account in determining the principal use of any premises for those purposes.

(4) The power to make regulations under subsection (3) above is exercisable by the Assembly (and not by the Secretary of State) in relation to premises supplied with water using the supply system of a water undertaker whose area is wholly or mainly in Wales.

17D The threshold requirement

(1) This section applies for the purpose of construing the reference to the threshold requirement in section 17A(3)(b) above in relation to the supply of water to any premises.

(2) The requirement is that, at the time when the licensed water supplier first enters into an undertaking with a customer to give the supply, the total quantity of water estimated to be supplied to the premises annually pursuant to the undertaking is not less than 50 megalitres.

(3) Any estimate of the quantity of water to be supplied to any premises for the purposes of subsection (2) above shall be made in accordance with guidance issued by the Authority with the approval of the Secretary of State.

(4) Any guidance issued under subsection (3) above may, in particular--

(a) specify--

(i) the factors to be, and not to be, taken into account;

(ii) the assumptions to be made; and

(iii) the method of calculation to be employed,

in making estimates; and

(b) make provision as to the commencement of the annual periods by reference to which estimates are to be made.

(5) Before giving his approval to any guidance issued under that subsection, the Secretary of State shall consult the Assembly.

(6) Subsections (1) to (4) of section 17B above apply to guidance issued under subsection (3) above as they apply to guidance issued under section 17A(9) above.

(7) The Secretary of State may make provision by regulations as to the circumstances in which a licensed water supplier is not, for the purposes of subsection (2) above, to be treated as entering into an undertaking with a new customer to give a supply of water to any premises (subject to subsection (12) below).

(8) The Secretary of State may by regulations amend subsection (2) above by substituting, for the quantity of water for the time being specified there, a different quantity of water (subject to subsection (12) below).

(9) Regulations under subsection (8) above--

(a) shall include provision for the amendment made by the regulations not to apply in relation to any undertaking entered into before the date on which the regulations come into force; and

(b) may include provision for that amendment not to apply in relation to any undertaking which is proposed, but not entered into, before that date.

(10) A statutory instrument containing regulations under subsection (8) above shall not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.

(11) Before making regulations under subsection (8) above, the Secretary of State shall consult--

(a) the Authority; and

(b) such other persons (if any) as the Secretary of State thinks it appropriate to consult.

(12) The powers to make regulations under subsections (7) and (8) above are exercisable by the Assembly (and not by the Secretary of State) in relation to premises supplied with water using the supply system of a water undertaker whose area is wholly or mainly in Wales.

(13) Subsections (9) and (11) above apply in relation to regulations made by the Assembly under subsection (8) above by virtue of subsection (12) above as they apply in relation to regulations made by the Secretary of State under subsection (8) above.

17E Determinations by the Authority

(1) The Authority may determine, in a case referred to it by a licensed water supplier or a potential customer of a licensed water supplier, whether a proposed supply of water by the supplier to the customer would be in accordance with the retail authorisation given to the supplier in the licence.

(2) The matters which the Authority may determine include the following matters--

(a) the extent of the premises to be supplied for the purposes of section 17A(3) above;

(b) whether the premises to be supplied are household premises (as defined in section 17C above); and

(c) whether the threshold requirement is satisfied in relation to the premises to be supplied (construed in accordance with section 17D above),

and also include any other matter the determination of which is relevant to those matters.

17F Procedure for granting water supply licences

(1) An application for--

(a) a water supply licence;

(b) the variation of a retail licence so that it gives also the supplementary authorisation; or

shall be made in such form and manner, and shall contain, or be accompanied by, such information and documents and such fee (if any), as may be prescribed.

(2) Within the prescribed period after the making of such an application, the applicant shall publish in the prescribed manner a notice of the application containing such particulars as may be prescribed.

(3) The particulars which may be prescribed by virtue of subsection (2) above include the time within which, and the address at which, representations or objections with respect to the application may be made.

(4) If the Secretary of State or the Authority proposes to refuse the application, he or it shall give to the applicant a notice--

(a) stating that he or it proposes to refuse the application;

(b) stating the reasons why he or it proposes to refuse the application; and

and shall consider any representations or objections which are duly made and not withdrawn.

(5) The Secretary of State may make provision by regulations disapplying subsections (2) and (3) above in relation to an application under subsection (1) above in such circumstances as may be prescribed.

(6) A licence shall be in writing and, unless revoked or suspended in accordance with any condition contained in it, shall continue in force for such period as may be specified in or determined by or under the licence.

(7) As soon as practicable after granting a licence or variation of a licence, the Secretary of State or the Authority shall serve a copy of the licence or licence as varied--

(a) on the licence holder;

(b) on the Assembly;

(d) on the Environment Agency;

(e) on the Council;

(f) on each relevant undertaker;

(g) on each licensed water supplier (other than the holder of the licence in question);

(h) if the licence or variation is granted by the Secretary of State, on the Authority;

(i) if the licence or variation is granted by the Authority, on the Secretary of State.

(8) Any sums received by the Secretary of State or by the Authority by virtue of this section shall be paid into the Consolidated Fund.

Licence conditions

17G Water supply licence conditions

(1) A water supply licence may include--

(a) such conditions as appear to the Secretary of State or, as the case may be, the Authority to be requisite or expedient having regard to the duties imposed on him or it by Part 1 of this Act;

(b) conditions requiring the rendering to the Secretary of State of a payment on the grant of a water supply licence, or payments while such a licence is in force, or both, of such amount or amounts as may be determined by or under the conditions.

(2) Conditions may be included by virtue of subsection (1)(a) above in a water supply licence whether or not they are connected with the supply of water or the introduction of water into a water undertaker's supply system.

(3) Conditions included in a water supply licence may--

(a) require the holder of the licence to comply with any direction given by a specified relevant person as to specified matters or matters which are of a specified description;

(b) require the holder of the licence to do or not to do specified things or things which are of a specified description, except in so far as a specified relevant person consents to the holder's not doing or doing them; and

(c) provide for the reference to and determination by a specified relevant person of specified questions, or questions which are of a specified description, which arise under or in connection with the licence.

(4) For the purposes of subsection (3) above--

(a) the following are relevant persons--

(i) the Secretary of State;

(ii) the Authority;

(iii) the Assembly;

(iv) the Environment Agency; and

(b) "specified" means specified in the licence in question.

(5) Conditions included in a water supply licence may contain provision for the conditions to have effect, cease to have effect or be modified at such times, in such manner and in such circumstances as may be specified in or determined in accordance with the conditions.

(6) Any such condition as is referred to in subsection (5) above shall have effect in addition to the provision made by this Chapter with respect to the modification of the conditions of a licence.

(7) Any sums received by the Secretary of State by virtue of this section shall be paid into the Consolidated Fund.

17H Standard conditions of water supply licences

(1) Such conditions as may be--

(a) determined by the Secretary of State (after consulting the Assembly); and

(b) published by him in such manner as he considers appropriate,

shall be standard conditions of water supply licences granted by the Secretary of State or the Authority.

(2) The standard conditions which may be determined may be different for--

(a) retail licences; and

(b) combined licences,

and standard conditions relating to the retail authorisation may be different depending on whether they are to relate to retail licences or combined licences.

(3) The power to determine standard conditions in relation to retail licences and combined licences may be exercised only before the grant of (respectively) the first retail licence and the first combined licence (but this is without prejudice to the power to modify standard conditions in accordance with the provisions of this Chapter).

(4) The standard conditions for the purposes of water supply licences of either description may contain provision--

(a) for any standard condition included in a licence of that description not to have effect until brought into operation in such manner and in such circumstances as may be specified in or determined under the standard conditions;

(b) for the effect of any standard condition included in such a licence to be suspended in such manner, and in such circumstances, as may be so specified or determined; and

(c) for any standard condition included in such a licence which is for the time being suspended to be brought back into operation in such manner and in such circumstances as may be so specified or determined.

(5) Subject to subsection (6) below, each condition which is a standard condition shall be incorporated by reference in each water supply licence (or in each such licence to which the standard condition applies).

(6) Subject to the following provisions of this section, the Secretary of State or the Authority may, in granting a licence, exclude or modify any of the standard conditions to such extent as he or it considers requisite to meet the circumstances of a particular case.

(7) Before excluding any standard conditions or making any modifications under subsection (6) above, the Secretary of State or the Authority shall give notice--

(a) stating that he or it proposes to exclude the conditions or make the modifications and setting out the effect of so doing;

(b) stating the reasons why he or it proposes to exclude the conditions or make the modifications; and

(c) specifying the time (not being less than twenty-eight days from the date of publication of the notice) within which representations or objections with respect to the proposed exclusions or modifications may be made,

and shall consider any representations or objections which are duly made and not withdrawn.

(8) A notice under subsection (7) above shall be given--

(a) by publishing the notice in such manner as the Secretary of State or (as the case may be) the Authority considers appropriate for the purpose of bringing the notice to the attention of persons likely to be affected by the making of the exclusions or modifications; and

(b) by serving a copy of the notice--

(i) on the Assembly;

(ii) on the Chief Inspector of Drinking Water;

(iii) if the notice is published by the Secretary of State, on the Authority;

(iv) if the notice is published by the Authority, on the Secretary of State.

(9) If, within the time specified in the notice under subsection (7) above, the Secretary of State (after consulting the Assembly) directs the Authority not to exclude or modify any standard condition, the Authority shall comply with the direction.

(10) The Secretary of State or the Authority shall not exclude any conditions, or make any modifications, under subsection (6) above unless he or it is of the opinion that the exclusions or modifications are such that--

(a) the licence holder would not be unduly disadvantaged in competing with other holders of water supply licences; and

(b) no other holder of a water supply licence would be unduly disadvantaged in competing with other holders of such licences (including the holder of the licence).

(11) The modification under subsection (6) above of part of a standard condition shall not prevent any other part of the condition from continuing to be treated as a standard condition for the purposes of this Chapter.

Modification of licences

17I Modification of water supply licences by agreement

(1) Subject to the following provisions of this section, the Authority may modify the conditions of a particular water supply licence.

(2) The Authority may not make any modifications under this section unless the licence holder has consented to the modifications and, in the case of standard conditions of the licence, the Authority is of the opinion that the modifications--

(a) are requisite to meet the circumstances of the particular case; and

(b) are such that--

(i) the licence holder would not be unduly disadvantaged in competing with other holders of water supply licences; and

(ii) no other holder of a water supply licence would be unduly disadvantaged in competing with other holders of such licences (including the holder of the licence being modified).

(3) Before making modifications under this section, the Authority shall give notice--

(a) stating that it proposes to make the modifications and setting out their effect;

(b) stating the reasons why it proposes to make the modifications; and

(c) specifying the period (not being less than twenty-eight days from the date of publication of the notice) within which representations or objections with respect to the proposed modifications may be made,

and shall consider any representations or objections which are duly made and not withdrawn.

(4) A notice under subsection (3) above shall be given--

(a) by publishing the notice in such manner as the Authority considers appropriate for the purpose of bringing the notice to the attention of persons likely to be affected by the making of the modifications; and

(b) by serving a copy of the notice on--

(i) the licence holder;

(ii) the Council;

(iii) the Secretary of State;

(iv) the Assembly; and

(v) the Chief Inspector of Drinking Water.

(5) If, within the period specified in the notice under subsection (3) above, the Secretary of State (after consulting the Assembly) directs the Authority not to make any modification, the Authority shall comply with the direction.

(6) The modification under this section of part of a standard condition of a licence shall not prevent any other part of the condition from continuing to be regarded as a standard condition for the purposes of this Chapter.

17J Modification of standard conditions of water supply licences

(1) Subject to the following provisions of this section, the Authority may modify the standard conditions of retail licences or combined licences.

(2) Where at any time the Authority modifies the standard conditions of retail licences or combined licences under this section the Authority may make such incidental or consequential modifications as it considers necessary or expedient of any conditions of any licence of that description.

(3) Before making any modifications under this section, the Authority shall give notice--

(a) stating that it proposes to make the modifications and setting out their effect;

(b) stating the reasons why it proposes to make the modifications; and

and shall consider any representations or objections which are duly made and not withdrawn.

(4) A notice under subsection (3) above shall be given--

(b) by serving a copy of the notice on--

(i) each relevant licence holder;

(ii) the Council;

(iii) the Secretary of State;

(iv) the Assembly; and

(v) the Chief Inspector of Drinking Water.

(5) If, within the time specified in the notice under subsection (3) above, the Secretary of State (after consulting the Assembly) directs the Authority not to make any modification, the Authority shall comply with the direction.

(6) The Authority may not under this section make any modifications of the standard conditions of retail licences or combined licences unless--

(a) no notice of objection to those modifications is given by any relevant licence holder to the Authority within the time specified in the notice under subsection (3) above;

(b) if one or more relevant licence holders give notice of objection to the Authority within that time--

(i) the proportion (expressed as a percentage) of the relevant licence holders who have given notice of objection is less than such percentage as may be specified in an order made by statutory instrument by the Secretary of State; and

(ii) the percentage given by subsection (7) below is less than such percentage as may be so specified; or

(7) The percentage given by this subsection is the proportion (expressed as a percentage) of the relevant licence holders who have given notice of objection, weighted according to their market share at such time and in such manner as may be specified in an order under subsection (6) above.

(8) This subsection applies where the Authority is satisfied that--

(a) the effect of the standard conditions is such as to impose a burden affecting relevant licence holders in the carrying on of activities to which the modifications relate;

(b) the modifications would remove or reduce the burden without removing any necessary protection; and

(c) the modifications are such that no holder of a water supply licence would be unduly disadvantaged in competing with other holders of such licences.

(9) An order under subsection (6) above may include such supplemental, consequential and transitional provision as the Secretary of State considers appropriate.

(10) Before making an order under subsection (6) above, the Secretary of State shall consult the Assembly.

(11) A statutory instrument containing an order under subsection (6) above shall not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.

(12) Where the Authority modifies the standard conditions of retail licences or combined licences, the Authority shall--

(a) also make (as nearly as may be) the same modifications of those conditions for the purposes of their incorporation in licences of that description granted after that time; and

(b) publish the modifications in such manner as it considers appropriate.

(13) In this section "relevant licence holder", in relation to proposed modifications of standard conditions of retail licences or combined licences, means the holder of a licence of that description--

(a) which is to be modified under the proposals by the inclusion of any new standard condition; or

(b) which includes any standard conditions to which the proposals relate, other than standard conditions which are not in effect (by virtue of anything done under section 17H(4) above) at the time specified in the notice under subsection (3) above.

17K Water supply licences: modification references to Competition Commission

(1) The Authority may make to the Competition Commission (in this section and the following provisions of this Chapter referred to as "the Commission") a reference which is so framed as to require the Commission to investigate and report on the questions--

(a) whether any matters which--

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