27th Jul 2020 11:53
(Alliance News) - UK water regulator Ofwat on Monday said it will extend its liquidity support scheme until the end of October as the industry continues to feel the bite of Covid-19.
Ofwat added that that it will not allow providers to the business retail market to opt into the scheme if they have not already done so by the end of July.
United Utilities Group PLC, Severn Trent PLC and Pennon Group PLC are water utilities listed on the London Stock Exchange. Pennon was up 0.4% Monday, while United Utilities was up 0.8% and Severn Trent up 0.9%.
The decisions were made in response to a consultation by Ofwat on the business retail market, following measures it outlined in May. The regulator will make a final decision on these measures on Thursday.
Ofwat on Monday set out its "current position in light of those responses", Ofwat said.
It will implement a "limited extension of liquidity support until the end of October 2020".
"The total amount any one retailer will be allowed to defer will be subject to a cap equal to 40% of primary charges due from March-July 2020," the regulator explained.
Deferred wholesale charges will need to be repaid in full by the end of March 2021.
Retailers can apply for temporary vacancy flags, a scheme which allows charges to be deferred while premises are unoccupied, until the end of July.
"In the event of reduced consumption or local lockdowns, Ofwat suggests retailers seek to obtain meter reads to reflect actual consumption in the market, or where a meter read cannot be obtained, the retailer should engage with the customer to obtain an accurate estimate of consumption," Ofwat added.
By Eric Cunha; [email protected]
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