The government has expanded the eligibility criteria of the Energy Bill Relief Scheme for businesses to include all fixed contracts signed from 1 December 2021.
The cut-off date was 1 April 2022 when the government announced the scheme last month, providing a discount on wholesale gas and electricity prices for all non-domestic customers – including all UK businesses, the voluntary sector like charities and the public sector such as schools and hospitals.
The support provided to business comes in the form of a wholesale price set at £211 per megawatt hour (MWh) for electricity and £75 per MWh for gas. This is the supported wholesale price, which makes up part of the overall kWh rate that a business pays.
For comparison, wholesale costs in England, Scotland and Wales for this winter are currently expected to be around: £600 per MWh for electricity and £180 per MWh for gas.
For fixed contracts the discount will reflect the difference between the government supported price and the relevant wholesale price for the day the contract was agreed. The government will publish the wholesale prices it will use for calculating this for each day from 1 December 2021. For variable, deemed and all other contracts, the discount will reflect the difference between the government supported price and relevant wholesale price, but be subject to a ‘maximum discount’ of £345/MWh for electricity and £91/MWh for gas.
Businesses on variable/flexible contracts will need to choose if they move to fixed contracts. Third party intermediaries (TPIs)/energy brokers have no influence over the per unit cost reductions that will be applied to energy costs under the scheme. Businesses do not have to take out a new contract or change their contract for appropriate reductions to automatically be applied to your bills.
It will apply to energy usage from 1 October 2022 to 31 March 2023, running for an initial six-month period for all non-domestic energy users. The savings will be first seen in October bills, which are typically received in November.
The scheme will be reviewed after three months to consider which sectors need support after the initial period.
For more details, see government guidance.
