Working group to advance commonality in connection charging

Ofwat has endorsed the idea of a sector-led working group to improve connections charging – particularly to promote greater commonality in terminology for connection services and the better use of worked examples for customers – in time for changes to be reflected in 2022-23 charges.

The regulator also intends to carry out further analysis of companies’ published costs and charges because “we remain concerned that variation between companies’ charges may, at least in part, be due to endogenous factors (such as the allocation of costs, recovery of overheads and cost-reflectivity of contractors’ rates)”.

They are the two work streams that emerged in a Conclusions document from Ofwat following its May 2020 consultation on English companies’ charging arrangements for new connections. This sought to better understand the nature and cause of the inconsistencies in how companies were implementing its Charging Rules for New Connection Services (English Undertakers), in the light of feedback it had received from stakeholders.

Ofwat welcomed the sector’s enthusiasm to work on improvements, noting in particular: “We are pleased certain companies have already approached us with a view to taking a substantial role in bringing the sector together, demonstrating the leadership qualities we noted in our Review of incumbent company support for effective markets.”