News

Government Energy Bill Relief Scheme Latest Announcement

On the 21st September 2022 the Government provided further information on the plans for limiting the wholesale costs for gas and electricity for non-domestic customers. 

The Energy Bill Relief Scheme will fix the wholesale prices for gas and electricity, but the final rate paid by businesses will not be capped. 

The facts and figures for the scheme:

• The Scheme will be available to everyone on a non-domestic contract including, businesses, voluntary sector organisations, such as charities. Public sector organisations, hospitals, and care homes

• Your Energy provider will be allowed to apply a capped wholesale price of 21.1p/kWh for electricity and 7.5p/kWh for gas.

• you will see a discount line on your bill showing the difference between the governrnemt published wholesale cost for the day you signed your agreement, minus the cap = discount on your bill as p/kwh against consumption for that month.

 

• The government published wholesale prices will be published on the 30th September 2022.

• The maximum discount for clients not on a fixed contract will be 34.5 p/kWh on electric and 9.1 p/kWh on gas

• The cap only applies to energy contracts signed with suppliers since 1st April 2022

• It will apply to energy usage from 1 October 2022 to 31st March 2023

• The scheme will be reviewed after 3 months with the possibility of an extension beyond the initial 6 months to support “vulnerable businesses”

For comparison, wholesale costs for this winter are currently expected to be around 60p/kWh for electricity and 18p/kWh for gas.

How it works?

On 30th September the government will publish the wholesale prices that suppliers will use to apply the discount. The discount will be the difference between the published wholesale prices, minus the price cap = discount shown on bill.

If you are out of contract now:

The government has advised that you set up a contract immediately, the deductions will automatically be applied for the duration of the scheme.

If you are currently on a Deemed, default or variable tariff you will still receive the support, however the discount will be up to a maximum of the difference between the capped price and the average expected wholesale price over the period of the scheme. You also need to be aware that you will be subject to price increases if your energy provider changes their ‘out of contract’ rates.

If you are looking at signing a new fixed rate energy contract:

Once you have fixed your contract and this has gone live, the reduction will be applied for the period of the scheme, and this will be applied automatically by your supplier. It’s important to contract and not end up on out of contract rates, as you could end up paying more.

If you signed your energy contract before the 1st of April:

You will not be eligible for any support available from this scheme. This is because the prices prior to the 1st April are significantly lower than prices in the current market or expect to see over this winter.

If your contract is due for renewal after 31st March 2023:

The Government has announced an extension to the support scheme beyond the initial 6 months, but this is likely to be more target, rather than the initial board brush approach. Further information will be given later.

Please contact us if you have any questions or wish to review your energy costs now.