(Changes story identifier, adds detail, shares)
July 26 (Reuters) - Britain's water regulator on Monday said
it would allow retailers to increase prices they charge their
non-household customers temporarily from next year to offset
higher bad debt costs due to the COVID-19 pandemic.
Water companies from April will bear 25% of bad debt costs
where these are more than 2% of non-household revenue, and
non-household customers will bear the rest, the Water Services
Regulation Authority (Ofwat) said in a statement.
The regulator added that the adjustments to price caps would
apply for a minimum of two years.
Utilities have been struggling with a sharp drop in water
consumption by businesses as virus restrictions have moved
people out of office buildings and into remote working, while
defaults have also been rising.
Some of the largest water companies in Britain include
Thames Water, United Utilities, Severn Trent and
Southwest Water owner Pennon. Their shares were down
marginally on Monday by 1325 GMT.
"These decisions aim to protect the interests of
non-household customers in the short and longer term ... as the
business retail market continues to feel the impacts of
COVID-19," said Georgina Mills, Ofwat's business retail market
director.
Ofwat also confirmed on Monday that it planned to start its
wider review later this year of the price caps for the Retail
Exit Code, which was put in place to give protection to business
customers.
(Reporting by Muvija M in Bengaluru; additional reporting by
Yadarisa Shabong; editing by Vinay Dwivedi, Ramakrishnan M. and
David Evans)