Scotland's retailers to repay prepay and defer wholesale charges

The Water Industry Commission for Scotland (WICS) is today expected to implement two new Charges Relief Schemes to help businesses cope with coronavirus challenges – Payment Refund and Wholesale Charge Deferral – following close of consultation on Friday.

Prepayment Refund Scheme

Licensed providers (retailers) will repay to customers the wholesale component of any prepayments their customers have made for services provided between 24 March 2020 and before 24 September 2020. The only exceptions are if the customer has already received a refund or expressly opts out.

Wholesale Charge Deferral Scheme

If customers request, licensed providers must apply to Scottish Water for a deferral of volumetric charging for water and sewerage. Additionally, non-household premises with a 25mm or smaller meter and non-household unmetered premises can also require their licensed provider to apply to Scottish Water for a 60% deferral of their wholesale fixed charges for water, sewerage and drainage. Trade effluent is not covered.

Licensed providers will be required to pay interest to Scottish Water on the amount of deferred wholesale charges at 2.5% a year. Additionally, WICS told licensed providers it expects them to reduce their retail margin by agreement for the deferral period, to reflect cost savings from activities like meter reading and site visits, which will be reduced because of the charge deferral.

WICS consulted for a few days last week on the schemes, which will be backdated to 24 March 2020 and last for six months until 24 September 2020 – or extended until the end of 2020 subject to a review in August.