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With effect from 1 December an Exceptional Market Disruption Charge for late payment charges may be applicable. Please use paperless billing and opt for payment by Direct Debit to avoid the risk of incurring these additional charges.
As you will all be aware, there has been a significant decline in the credit rating of English water companies, including in particular Thames Water. Economically, Ofwat is continuing to use Castle Water as a buffer between customers and the water companies, without any recognition of our increased costs, which are nothing to do with us or our customers. Since Summer 2023, and the possible insolvency of Thames Water, Castle Water has had significant, unexpected financing costs, which are not covered in our normal tariffs. The cost to Castle Water is particularly related to the relatively small percentage of our customers who do not pay within their payment terms. Castle Water is fortunate to have committed shareholders who are able to step in and provide this financing, but it has a higher cost than bank funding.
We have worked hard since Summer 2023 to explain the position to Ofwat and have formally sought a change to the market codes through Codes Change Proposal CPW132, to temporarily reduce our working capital, because the banks who provide part of our financing have become more risk averse regarding counterparties of Thames Water. Ofwat hasn’t allowed this. You may have seen my earlier blog on a related issue, following which a number of Castle Water’s customers wrote to us or Ofwat in support of our position. Consequently, and given the protracted period in which the water sector has had a weaker balance sheet than permitted under its licence, Castle Water now needs to take additional steps to protect the vast majority of our customers from adverse impacts – we do not want to reduce our level of investment in improving our systems or reduce customer service levels.
From 1 December, customers who pay more than 30 days beyond their payment terms (normally 14 days), will be charged the Exceptional Market Disruption Charge. This will be a charge of £44, in addition to normal late payment/collection charges. Customers who pay within 30 days of the due date on their invoice will not receive this additional charge. We do not want to take this step and have tried for over a year to avoid any impact on customers. We expect that this charge will only be necessary until Thames Water regains its Investment Grade status.
Direct Debit
I would encourage you to consider signing up to Direct Debit. This removes the risk of incurring any late payment charges, benefitting from the Direct Debit guarantee provided by your bank and if you receive annual or bi-annual bills, spreading your payments is interest-free. You can sign up to Direct Debit on the customer portal here.
Customer Portal
If you are not already using the customer portal to receive your bills, I would encourage you to register for an account here.
- Your water bills are available online on our customer portal, so they can be viewed instantly, without risk of postal delays.
- Our customer portal is designed to make it efficient for customers to manage their account, including:
- Switching to Direct Debit, for a simple way to pay for your water bills and avoid late payment charges.
- Submitting meter readings, ensuring you only ever pay for the water that you use.
- Enabling paperless billing and accessing your water bills instantly online, to opt for an eco-friendlier option and avoid postal delays.
- Accessing our online web chat to receive instant support on your Castle Water account.
- Castle Water has the best meter reading performance in the country, as confirmed by MOSL’s Annual Market Performance Report, leading to accurate billing.
As ever, if you have any concerns about this or your water services, I am always keen to help – you can email me directly at ceo@castlewater.co.uk
