Photo credit: Scott Graham
Ofwat has opened a consultation on how the charges paid by new water suppliers to established companies are set out, part of an effort to make the figures clearer and more consistent. The proposals would add a formal annex to Ofwat’s bulk charging rules, setting standard ways for incumbent companies to calculate and present worked examples of what they charge.
The context
New appointments and variations, known as NAVs, are companies licensed to provide water or sewerage services to a specific area instead of the regional incumbent, giving developers and large business customers an alternative supplier. Most NAV sites rely on a bulk supply or discharge agreement with the incumbent, so the charges attached to those agreements shape whether competition in the market can work. Ofwat says the number of NAV applications has grown, passing 2,400 by early 2026.
What is proposed
The central change would move away from fully standardised assumptions towards a mix of standard and company-specific parameters, so that worked examples better reflect each incumbent’s actual charging methods and give NAVs a more accurate idea of the bulk charges they would face on a new development. Ofwat also proposes a new worked example covering residential developments that need a wastewater pumping station, a type of site it says is becoming more common, and standardised tables requiring incumbents to present wholesale charges, bulk charges and the resulting NAV discount in a common format.
The consultation closes on 10 September, with Ofwat intending to finalise the changes in autumn 2026 and apply them to charges from 1 April 2027. Further consultations on common terms, avoided costs and cost drivers are expected to follow.
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