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Clause 2 - The supply system of a water undertaker

Water Bill – in a Public Bill Committee at 3:00 pm on 5th December 2013.

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Question proposed,That the clause stand part of the Bill.

Photo of Dan Rogerson Dan Rogerson The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

Clause 2 inserts into section 17B of the Water Industry Act 1991 new subsection (4A), which extends the definition of the water supply systems of English incumbent water companies and inset appointees to include reservoirs, treatment works and other storage facilities rather than only pipes and mains, as is currently the case. The current definition of a supply system covers the water mains and pipes downstream of a water treatment works as well as discrete non-potable supply systems. Extending the definition of supply systems will provide more opportunities for water supply licensees with wholesale authorisations to input water into the water network, which will increase the impact of the wholesale market reforms in the Bill.

In the water White Paper, we committed to extending new entrants’ access rights to undertakers’ treatment and storage systems to maximise their opportunities for providing efficient and innovative wholesale water supply. That will enable alternative suppliers to input water into any part of the network. For example, landowners or farmers with spare water will be able to apply for a licence to input water into the system, which can be used to supply their eligible premises, the premises of their customers or the premises of customers of other licensees.

The measure will allow firms to specialise in particular upstream activities. Extending competition in such a way provides an incentive for incumbent water companies to look at alternative supply options to expensive capital projects in meeting future demand. Those options might include working with local suppliers or purchasing supplies from neighbouring water companies. The current definition  of a supply system will be retained for incumbent water companies and inset appointees based wholly or mainly in Wales. The clause is vital to ensure the effectiveness of our upstream reforms.

Question put and agreed to.

Clause 2 accordingly ordered to stand part of the Bill.

Clause 3 ordered to stand part of the Bill.

Clause 4 ordered to stand part of the Bill.

Schedule 3 agreed to.