Energy Bill Relief Scheme for Businesses and Other Non-Domestic Customers

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Energy Bill Relief Scheme for Businesses and Other Non-Domestic Customers

Energy Bill Relief Scheme for businesses and other non-domestic customers

Discounts will be applied to energy usage initially between 1st October 2022 and 31st March 2023.

The discount is automatic so if you get a message asking for your bank details for this discount, it is likely to be a scam.  Energy suppliers will apply reductions to the bills of all non-domestic customers.

Who is eligible?

Anyone with a non-domestic contract

  • Businesses including halls and shops.
  • Voluntary sector organisations, such as schools, hospitals, and care homes.

Who are:

  • On an existing fixed price contract that was agreed on or after April 2022
  • Signing new fixed price contracts
  • On demand/out of contract or on variable tariffs
  • On flexible purchase or similar contracts

Reductions

The Government will provide a discount on your gas and electricity unit prices. To calculate your discount, the wholesale portion of the unit price you would be paying this winter will be compared to a baseline ‘government supported price’, which is lower than currently expected wholesale prices this winter.

For all non-domestic energy uses in Great Britain this government supported price has been set at

  • £211 per megawatt hour (MWh) for electricity
  • £75 per MWh for gas.

For comparison, wholesale costs in England, Scotland, and Wales, for this winter are currently expected to be around

  • £600 per MWh for electricity
  • £180 per MWh for gas

How it works:

Suppliers will apply reductions to the bills of all eligible non-domestic customers. The discount applied will be in pence per KWh (p/KW/h). This support will be the same for comparable contracts, but the absolute level of individual bills will continue to vary across different contracts and tariffs.

For fixed contracts the discount will reflect the differences between the government supported price and the relevant wholesale price for the day the contract was agreed. To receive a discount in per unit energy costs, the wholesale element of the price the customer is paying needs to be above the Government Supported Price, if it is, the per unit energy costs will automatically be reduced by the relevant p/KWh for the duration of the Scheme. Customers entering new fixed price contracts after 1st October will receive support on the same basis.

For variable, deemed and all other contracts, the discount will reflect the difference between the Government Supported Price and the relevant wholesale price, but will be subject to ‘maximum discount’, that will be determined at the beginning of the scheme. It is likely to be around £405/MWh for electricity and £115/MWh for gas subject to wholesale market developments. Non-domestic customers on default or variable tariffs will therefore pay reduced bills, but these will change over time and be subject to wholesale market developments.  For this reason, the government is working with suppliers to ensure that all customers are given the opportunity to switch to a fixed contract for the duration of the scheme if they wish, underpinned by the Energy Bill Relief Scheme. 

The support also includes the removal of Green Levies paid by non-domestic customers who receive support under the scheme.

Equivalent support will also be provided for non-domestic consumers who use heating oil or alternative fuels instead of gas or electricity – but there are no details on this yet.

There is more information and some examples of how the support will help different businesses here https://www.gov.uk/government/news/government-outlines-plans-to-help-cut-energy-bills-for-businesses This news item came out on 21st September.

If you need help and support, you will find advice on the Ofgem website here https://www.ofgem.gov.uk/

If your need support from your ACRE halls and shops adviser with an energy bill problem, please contact me Tessa Hall on [email protected] and I will endeavour to support you.  

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