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Last edited 21 Jul 2021
Ofwat is the Water Services Regulation Authority for England and Wales. It is the economic regulator of the water and sewerage sectors in those parts of the UK. Ofwat exercises its powers to protect the interests of consumers, promote value and safeguard future water and sewerage services by allowing efficient companies to carry out and finance their functions properly.
The formation of Ofwat came as a result of The Water Act of 1989 which brought about the privatisation of 10 publicly owned water and sewerage authorities. This resulted in the creation of the Drinking Water Inspectorate (the regulator of drinking water quality) and the Director General of Water Services (the economic regulator), which was supported by the Office of Water Services (Ofwat).
In 2006, these entities were replaced by the Water Services Regulation Authority. This organisation retained the name, Ofwat. It is financed through licence fees recovered from the water companies and it reports to Parliament.
The duties and powers of Ofwat are defined by sections 2 and 3 of the Water Industry Act 1991 (as amended). Under section 2 of the Act, Ofwat is responsible for carrying out numerous duties, including:
- Protecting the interests of consumers, wherever appropriate, by promoting effective competition.
- Ensuring water companies carry out their statutory functions properly.
- Ensuring water companies can finance the proper execution of their statutory functions.
- Ensuring water supply licensees and sewerage licensees properly carry out their licensed activities and statutory functions.
- Advancing the long-term resilience of water companies’ water supply and wastewater systems.
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