Ofwat has set out the new Charging Rules the water companies must use to draw up the Charging Arrangements which apply when providing new connection services for developers for water mains and/or public sewers.

The utilities’ Charging Arrangements for the cost of providing site specific infrastructure must be published in the form of a single document for developers no later than two months before the period in relation to which they have effect. Charging Arrangements must be published at least once in every year from 2018 onwards.

The Rules stipulate a number of requirements for the Charging Arrangements, including the need to explain how each charge has been calculated in a clear and accessible manner.

The charges covered by the Rules must also be set out in such a way that developers or other customers can "confidently work out a reasonable estimate" of the charges payable if they know the relevant parameters of a development.

The utilities must provide a reasonable choice of times and methods of payment of the charges and set these out in the Charging Arrangements.

Under the Rules the charges must not relate to work needed to modify or enhance existing network infrastructure in order to address pre-existing deficiencies or to enhance network flexibility, either in capacity or capability, which are unrelated to the proposed new connection services.

On the payment of security which the water firms are allowed to require prior to commencing work, the Rules say that the type and amount of security should not be “unduly onerous”, taking into account the risk to be borne by the utility in carrying out the work in question.

The types and the amount of any charges must be developed in accordance with the principle that charges covered by the Ofwat Rules should reflect:

• fairness and affordability;
• environmental protection;
• stability and predictability; and
• transparency and customer-focused service.

Click here to download Charging Rules for New Connection Services (English Undertakers)