When you pay for a utility connection

A connection quote tells you what you’ll pay. The small print tells you when. On a development, the timing can matter almost as much as the price, because money paid months before the work starts is money you can’t use on the build.

This guide explains when each party usually expects to be paid, what to look for in a quote, and how the choice between the network operator and a partner affects your cash flow.

The short version

• Network operators usually want paying when you accept. In electricity, that normally means paying within the offer’s validity period, before any work starts.
• Partners usually spread the cost. In our experience, they ask for the street works permit costs up front, a mobilisation payment before they start, and the rest once the work is complete.
• Some charges always go to the network operator. Application and design-checking fees are paid up front. Water infrastructure charges are due once the connection is made.
• Read the payment terms before you compare prices. Two quotes for the same price can put very different demands on your cash.

When the network operator wants paying

Electricity. To accept a network operator’s offer, you normally sign and pay within the offer’s validity period. One network operator, for example, says the signed acceptance and the payment must both reach it within 30 days of the quote, or the quote lapses. Check whether the offer lets you pay in stages.

Water. Water companies in England must offer a reasonable choice of when and how to pay. For their own work, some let you pay in full when you accept, or pay later if you provide security, such as a bond. The fees for your application and for checking the design are paid up front and aren’t refunded. Infrastructure charges are due once the connection is made.

Whichever utility it is, the payment terms are in the offer. Read them alongside the price.

When a partner wants paying

A partner, the accredited contractor who builds the new network on your site, prices the work in its quote and sets out how it wants paying. In our experience, most partners ask for:

1. Street works permit costs, up front. The partner applies for the permits to dig in the road and pays the fees when it does.
2. Mobilisation, before work starts. A payment to get people, plant and materials on site.
3. The balance, after completion. The rest of the price, once the work is done.

The exact split varies from partner to partner, so check it in each quote.

On a partner job you still pay some charges to the network operator: the application and design-checking fees, the work only the network operator can do, and, in water, the infrastructure charges. Depending on the arrangement, you pay these directly, or your partner pays them and includes them in its price.

Why the timing matters

Take two quotes for the same work at the same price. If the first must be paid in full when you accept, all of that money leaves your account months before anyone digs a trench. If the second asks for permits and mobilisation first and the rest after completion, most of the money stays with you until the work is finished.

That’s working capital you can spend on the build in the meantime, and it means you pay most of the price once you can see the work is done.

What to look for in the small print

• Validity. How long the price holds, and what happens if it lapses. See our guide on why quotes have a shelf life.
• Payment terms. What’s due on acceptance, before work starts, during the work and on completion, and how long you have to pay each invoice.
• The quote and the terms and conditions. Read both. They don’t always say the same thing about payment or validity, and the terms usually say they take priority.
• Security. Whether you need to provide a bond or other security, and when it’s released.
• What’s included. Permits, traffic management, reinstatement, meters and the network operator’s charges. Anything left out will be invoiced separately, often at a different time.
• Price changes. Whether the price can move with material costs, or if the design or programme changes.
• Extra visits and cancellation. What you’ll pay if the crew turns up and the site isn’t ready, or if you cancel close to the start date.

What to check first

• When each quote expects to be paid, not just how much.
• Which charges you’ll pay the network operator directly, and when.
• Whether your finance or funding drawdowns line up with the payment dates.
• That every quote you compare includes the same things, so the cash flow comparison is fair.