Section 143AA: Special provision under section 143A: financial arrangements

Water Industry Act 1991 · 1991 c. 56View on legislation.gov.uk

Part V: FINANCIAL PROVISIONS — CHAPTER I: CHARGES

Subsection (2) applies if regulations under section 143A impose on relevant undertakers whose areas are wholly or mainly in England requirements of the sort described in subsection (2)(d) of that section.

The Secretary of State may by regulations establish a scheme for the purpose of distributing among the relevant undertakers that are subject to the requirements all or part of the costs incurred by them in complying with the requirements (with the distribution to be on such basis as is provided for in the regulations).

The scheme may operate by way of—

direct payments between relevant undertakers, or
payments into and out of a fund established and maintained under the regulations.

Subsections (5) and (6) apply if a scheme is established under subsection (2).

If the Secretary of State or the Authority makes price control provision, they must design the provision with a view to not preventing the passing-on of costs as described in subsection (7).

The Secretary of State may by regulations—

make provision about how the Authority is to comply with subsection (5);
modify the effect of any price control provision made by the Authority with a view to enabling the passing-on of costs as described in subsection (7).

The passing-on of costs occurs when a relevant undertaker is able to recoup its relevant net costs by charging additional amounts under section 142(1).

An undertaker's relevant net costs are the total of its costs incurred in—

complying with the requirements referred to in subsection (1), and
complying with the requirements of the scheme,

less any payments it receives under the scheme.

In this section, "price control provision" means provision made by or under—

regulations under section 143A,
rules under section 143B, or
a condition of a relevant undertaker's appointment under Chapter 1 of Part 2,

that restricts the amount that may be charged by a relevant undertaker under section 142(1).

Where a determination within section 12(3) (determination by CMA provided for by undertaker's appointment) involves the making of price control provision, subsections (5) and (6) apply in relation to the CMA as they apply in relation to the Authority.

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