Ofwat has ordered Southern Water to repay nearly £6000 plus interest to the customer in a dispute with a developer about its charges for making new water supply connections to two blocks of flats.
Delivering its final decision in the dispute over the reasonableness of connection costs, Ofwat has ruled that Southern Water’s charge was too high and that the company should refund £5,863.69 (plus interest) to the customer.
Commenting on wider lessons for companies and customers, the water industry regulator said:
“As a starting point, we would expect the administration costs for a new water supply connection to be no more than £105.30.
“If a water company believes that a higher charge is justified, it must set out compelling evidence to demonstrate what administration activities it is carrying out, the costs that it incurred in providing the activities and the reasons these activities were necessary in order to provide the customer with the new connection(s).”
The final determination was on a dispute between Southern Water and Exel Construction Ltd over the expenses that Southern Water reasonably incurred in providing new connections between two blocks of flats and the public water network.
Overall, Ofwat has determined that the costs the utility had claimed to have incurred in undertaking the physical work to connect the blocks of flats were mostly reasonable.
However, Ofwat did not find that Southern Water had provided adequate evidence to justify the costs it claimed to have incurred in providing the administrative work that was necessary in order to provide the connections.
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