WICS extends Covid protections pending new scheme

The Water Industry Commission for Scotland (WICS) has extended the measures it put in place to support the Scottish water market through Covid-19 pressures, pending the development of a new scheme by the industry.

The commission has extended the existing wholesale deferral scheme until the new scheme is in place, which it said would be by the end of May at the latest. It also extended the temporary relaxation of the pre-payment requirement of wholesale charges, commenting that it expected the one-month prepayment to Scottish Water to be reintroduced in July 2021 and the two-month prepayment by the end of 2021.

Following WICS’ November consultation on steps to transition the market back to normal operations and to ensure the Covid-19 experience is used to improve the market framework, licensed providers established a working group, chaired by Citizens Advice Scotland, to develop proposals to address the issues WICS had set out. The Commission has asked the working group to submit a final proposal by 15 March 2021, and will issue a decision by 31 March.

In the meantime and to assist the process, WICS set out some guiding principles and timescales for the implementation of new measures. Among the measures, WICS set out its intention to apply a new licence condition through which licensed providers will need to demonstrate their financial resilience to withstand external shocks.

Elsewhere it said the new arrangements should: be targeted at SMEs as the most affected customers; be sufficiently flexible to accommodate individual retailer/customer arrangements; be widely communicated and publicised; not leave customers worse off (no fees/penalties); and be transparent and auditable via a Market Health Check by October 2021.

The Commission added there should be no detriment to the core business of Scottish Water. It said: “Scottish Water would charge an annual interest of 3.5% on any deferred charges and may cap the amount that each licensed provider is allowed to defer based on licensed providers’ creditworthiness and financial position.”