of our Rules (CMA204) and Guide (CMA205) are specified in footnotes for ease of reference. 7. The primary duties set out in section 2(2A) of the Act require Ofwat to perform the specified powers and duties in the manner in which it considers is best to:
(a) further the consumer objective, which is to protect the interests of consumers, wherever appropriate by promoting effective competition between persons engaged in, or in commercial activities connected with, the provision of water and sewerage services (consumer objective); (b) secure that the functions of water companies are properly carried out as respects every area of England and Wales (functions duty); 33 (c) secure that water companies are able (in particular, by securing reasonable returns on their capital) to finance the proper carrying out of those functions (financing duty); 34 (d) secure that the activities authorised by licence of a water supply licensee or sewerage licensee (retailers in the business retail market) and any statutory functions imposed on it in consequence of the licence are properly carried out (licence duty); and (e) further the resilience objective.
The resilience objective is: (a) to secure the long-term resilience of water companies’ supply and sewerage systems as regards environmental pressures, population growth and changes in consumer behaviour; and (b) to secure that undertakers take steps for the purpose of enabling them to meet, in the long term, the need for the supply of water and the provision of sewerage services to consumers, including by promoting:
(i) appropriate long-term planning and investment by relevant undertakers; and (ii) the taking by them of a range of measures to manage water resources in sustainable ways, and to increase efficiency in the use of water and reduce demand for water so as to reduce pressure on water resources. 35 8. The secondary duties require Ofwat to exercise these primary duties in the manner which it considers is best calculated to: (a) promote economy and efficiency on the part of appointed companies holding licences (efficiency duty); 33 We use ‘water companies’ here to denote ‘a water undertaker and a sewerage undertaker’ as referenced in the Guide ( CMA205) , paragraph 2.4(b).
34 We use ‘water companies’ here to denote ‘appointed companies’ as referenced in the Guide ( CMA205) , paragraph 2.4(c). 35 We use ‘water companies’ supply and sewerage systems’ here to denote ‘water undertakers’ supply systems and sewerage undertakers’ sewerage systems’ as referenced in the Guide ( CMA205) , paragraph 2.4(e). 26