Changes of Payment Terms for Wholesale Charges
The Scottish Government announced measures to support the water market and business customers in light of the economic impact of the coronavirus in late March. From April, wholesale payment terms were temporarily relaxed so that charges became due in the supply month to which they relate, two months later than normal.
The CMA revised their settlement timetable accordingly.
The timing of the reintroduction of prepayment will depend on which option a Licensed Provider chose following the publication of ‘COVID-19 Measures in Support of Non-household customers - Additions to the Wholesale Deferral Scheme’ by WICS on 1 June 2020. We will write to all Licensed Providers ahead of the reintroduction of prepayment confirming the timing, depending on the option they have chosen. Further details of the timetable can be found in section 9 and Annex 1 of the Guidance Document linked above.
The timing of reconciliation invoices (i.e. for R1, R2, R3 and RF settlement runs) is not affected by the temporary changes to payment terms.
Scottish Water has suspended the application of late payment interest whilst payment terms are relaxed. Interest continues to be paid to Licensed Providers on any wholesale charges which have been paid in advance, in accordance with clause 8.8.2 of the Wholesale Services Agreement.
These changes have been made to recognise the extraordinary pressures being placed on many businesses and the knock-on effect they will have on the cashflow of Licensed Providers. The intention is to ensure that business customers impacted by the current economic pressures benefit appropriately from these measures.