27th Apr 2020 18:23
(Alliance News) - UK water regulator Ofwat on Monday proposed measures to address the "liquidity challenge" faced by water retailers during the Covid-19 outbreak.
Ofwat's proposals come after a consultation after it announced initial measures earlier in April.
The watchdog said retailers should receive financial support until the end of July, but this could be extended following a probe and further consultation early in the summer.
Ofwat added that retailers will be required to pay wholesalers the higher of either 60% of bills due, or a portion of income which the retailers themselves receive from their own customers.
"Ofwat will continue to analyse evidence from the public consultation and consider the recommendation of the Industry Codes Panel before making and publishing final decisions after markets close on Thursday, April 30," the watchdog said.
"Reflecting consultation responses, Ofwat thinks that any deferred wholesale charges should be paid back in full by end March 2021."
Earlier in April, Ofwat backed restricting retailers from charging interest or late payment fees to business customers.
Ofwat explained at the time that proposals were made to "ensure businesses affected by Covid-19 are not being pursued for non-payment of water bills" and to "minimise the disruption that retailer failure could cause to business customers and the trading parties who are operating within it".
United Utilities Group PLC, Severn Trent PLC and Pennon Group PLC are among the water companies listed on the London Stock Exchange.
By Eric Cunha; [email protected]
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