“The Energy Bill Relief Scheme will see wholesale energy prices for all firms capped for six months from 1 October. It will apply to fixed contracts agreed on or after 1 April 2022, as well as to deemed, variable and flexible tariffs and contracts. It will apply to energy usage from 1 October 2022 to 31 March 2023, running for an initial 6-month period for all non-domestic energy users. The savings will be first seen in October bills, which are typically received in November.”
What does this mean for you and your business?
If you are already on a fixed contract: Under the scheme, wholesale prices are expected to be fixed for all non-domestic energy customers at £211 per MWh for electricity and £75 per MWh for gas for six months. A discounted price per unit of gas and electricity and less than half the wholesale prices anticipated this winter.
Eligible — If you signed your contract on or after 1 April 2022 then you will be eligible, and support (in the form of a p/kWh discount) will be automatically applied to bills.
Not Eligible — If you signed your contract before 1 April 2022, it’s understood that you will not be eligible for relief.
Please note that in addition to the government-supported wholesale rate, you will continue to pay the following:
If you are on default, deemed or variable tariffs
If you are in a variable contract (on out of contract rates/deemed rates) then support will be capped at a discounted rate. This will be up to a maximum of the difference between the Supported Price and the average expected wholesale price over the period of the Scheme.
The amount of this Maximum Discount is likely to be around £405/MWh for electricity and £115/MWh for gas, subject to wholesale market developments so, if you are on default, deemed or variable rates you will pay. Reduced bills for the six-month period, but these will still change over time and may still be subject to price increases.
Customers entering new fixed price contracts after 1 October will receive support on the same basis therefore at this stage, we are recommending clients that they will be at a significant advantage and will be able to take advantage of increased discount if they are on fixed rates. In conclusion, our advice would be, that if you haven’t already done so, speak to your consultant to negotiate a fixed contract.
What will happen after 31st March 2023?
The scheme will run for an initial 6 months and will be reviewed after 3 months. It’s thought that further support will be provided for the most-vulnerable non-domestic customers. We will update you as when we know more.
What do you need to do now?
“You do not need to take action or apply to the scheme to access the support. It will automatically be applied to bills in the form of a p/kWh discount”.— Alice Kinnard
The Government is working with suppliers to ensure that those not currently in a contract are given the opportunity to switch to a fixed contract/tariff for the duration of the scheme if they wish.
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