Business Secretary Jacob Rees-Mogg has unveiled more details of the new Energy Bill Relief Scheme, which will provide a discount on wholesale gas and electricity prices for non-domestic customers.
Support will take the form of a per kWh discount, which will automatically be applied to bills. The discount will apply to fixed contracts agreed on or after April 1, 2022, as well as to deemed, variable and flexible tariffs and contracts. It will apply to energy usage for an initial six-month period, from October 1, 2022 to March 31, 2023.
Under the scheme, the government will set a Supported Wholesale Price for gas and electricity. The level will be confirmed on September 30 but is expected to be £211 per MWh for electricity and £75 per MWh for gas, which would be less than half the wholesale prices anticipated this winter. It includes the removal of green levies paid by non-domestic customers who receive support under the scheme.
Non-domestic customers on existing fixed price contracts will be eligible for support as long as the contract was agreed on or after April 1, 2022. Provided that the wholesale element of the price the customer is paying is above the Government Supported Price, their 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 October 1 will receive support on the same basis.
For businesses on default, deemed or variable tariffs, they 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 over the period of the Scheme, meaning that bills are likely to change over time and may still be subject to price increases.
To take full advantage of the scheme, the government is encouraging customers in England, Scotland and Wales to switch to a fixed contract/tariff for the duration of the scheme. A parallel scheme, based on the same criteria and offering comparable support but recognising the “different market fundamentals”, will be established in Northern Ireland.
The government has committed to publishing a review into the operation of the scheme in three months, to inform decisions on future support after March 2023.
Prime Minister Liz Truss said: “I understand the huge pressure businesses, charities and public sector organisations are facing with their energy bills, which is why we are taking immediate action to support them over the winter and protect jobs and livelihoods.
“As we are doing for consumers, our new scheme will keep their energy bills down from October, providing certainty and peace of mind.
“At the same time, we are boosting Britain’s homegrown energy supply so we fix the root cause of the issues we are facing and ensure greater energy security for us all.”
Emergency legislation to bring the scheme into law will be introduced at the earliest opportunity when Parliament is back from recess in October.
