The regulator has set out plans in a consultation to ensure water companies offer “reasonable” terms and conditions to SLOs to avoid disputes between the two parties and improve transparency.
The consultation published by Ofwat states that water companies should only seek additional assurances over the ability of the SLO to deliver the new connection as set out in an agreement “when absolutely necessary”.
It states the starting point for negotiations should be that “suitably qualified SLOs are as able as the water company itself to provide contestable services”.
Alongside this, the regulator states the water companies should be able to “satisfy themselves” that the infrastructure being built by SLOs is in accordance with their requirements.
Ofwat is also seeking to ensure there is no disadvantage for the SOL in competing for new connection contracts by making them offer services only it can provide to SLOs on the same terms as it would offer itself.
Ofwat senior director, customers and casework, at Ofwat Richard Khaldi said: “Competition in the water connections market can benefit customers by driving more customer-focused, efficient and innovative services.
“We want to see that market working well for customers and are working with water companies to ensure SLOs can fairly compete to provide customers with choice. This includes ensuring water companies’ self-lay agreements are fair and that disputes can be avoided.”
He added: “Having an open conversation as a sector on the issues in this consultation will help to build greater trust and confidence between water companies and their SLO and developer customers. It will also drive improvements through the sharing of good practice.”
The consultation closes on 13 November and Ofwat plans to publish its final general expectations on the reasonableness of assurance-related terms in self-lay agreements by the end of the year.