The Government has published further details on how it will protect businesses, charities and public sector organisations from rising energy costs.
The new Energy Bill Relief Scheme will provide a discount on wholesale gas and electricity prices for all non-domestic customers – the support will be equivalent to the Energy Price Guarantee put in place for households.
How the scheme works
– The discount will apply to fixed contracts agreed on or after 1 April 2022 and deemed, variable and flexible tariffs and contracts;
– It will apply to energy usage from 1 October 2022 to 31 March 2023; and
– The savings will first be seen in October bills, which are typically received in November.
Applying the discount
There is no requirement to apply to the scheme – a p/kWh discount will automatically be applied to bills.
The Government has set a Supported Wholesale Price – expected to be £211 per MWh for electricity and £75 per MWh for gas.
Green levies have been removed.
Discount depending on contract type and circumstances
Existing fixed price contracts
Non-domestic customers on existing fixed price contracts will be eligible for support as long as the contract was agreed on or after 1 April 2022.
The per energy unit cost will automatically be reduced by the relevant p/kWh, provided that the wholesale element of the price they are paying is above the Government Supported Price.
Customers entering new fixed price contracts after 1 October will receive support on the same basis.
Default, deemed or variable tariffs
Non-domestic customers on default, deemed or variable tariffs will receive a per-unit discount on energy costs, up to a maximum of the difference between the Supported Price and the average expected wholesale price.
Non-domestic customers on default or variable tariffs will therefore pay reduced bills, but these will still change over time and may still be subject to price increases.
Businesses are being given the opportunity to switch to a fixed contract/tariff for the duration of the scheme, to utilise the security of a fixed per energy unit cost.
Flexible purchase contracts
Non-domestic customers on flexible purchase contracts will be offered a level of reduction calculated by suppliers according to the specifics of that company’s contract and will also be subject to the Maximum Discount.
A review of the scheme will be published in three months to inform decisions on support after March 2023.