Credit Support Requirement fixed at March level where retailers defer payment

Ofwat approved on Thursday an urgent code change raised by Thames Water, which sought to mitigate the risk of increased wholesaler bad debt where a retailer that post pays defers up to 50% of wholesale charges, in accordance with Ofwat’s decision allowing the deferral of up to 50% of wholesale charges in March, April and May (CPW093).

CPW095 states the Credit Support Requirement (CSR) is maintained at the March 2020 level where retailers that post-pay elect to defer charges using CPW093. Without the change, CSR would be adjusted to reflect lower settlement charges that will result from implementation of another urgent code change, CPW091, allowing business premises hit by Covid-19 to be temporarily flagged as vacant.

Ofwat approved the change with amendments to the legal drafting to clarify that where retailers elect to defer less than 50% of charges, they will still be required to lodge CSR at the March 2020 level.