3.—(1) The Secretary of State may, on the application of a water undertaker, determine an area to be an area of water scarcity for the purposes of these Regulations if he considers it appropriate to do so having regard to–
(a)the likely demand for water in that area over the period of 10 years following the application;
(b)the water resources which are, or could be made, available for meeting that demand; and
(c)the measures that the undertaker could take for meeting or managing that demand.
(2) A determination under this regulation shall have effect for such period as may be specified by the Secretary of State and may be revoked by him.
(3) Before making or revoking a determination under this regulation, the Secretary of State shall consult–
(a)the Director;
(b)the Environment Agency; and
(c)bodies appearing to him to be representative of the customers of water and sewerage services in the relevant area.