Government Announces Support for Businesses Amid Energy Crisis

A new Government Energy Bill Relief Scheme was announced on 21 September 2022 and will provide a discount on wholesale gas and electricity prices for non-domestic customers (i.e. businesses).

This scheme will provide businesses, charities and other public sector organisations with equivalent relief to what households have received through the Energy Price Guarantee. It will apply to fixed contracts agreed on or after 1 April 2022 and to deemed variable and flexible contracts. However, any fixed contracts agreed before 1 April 2022 will not be eligible for the scheme.

The initial period for the scheme will run from 1 October 2022 to 31 March 2023. Customers will not need to take action because support will be applied automatically to bills from 1 October 2022.

This will come as welcome news to health and social care provider across the nation, who have been struggling with running costs due to the rises in costs of living and energy prices.

The Government has set a Supported Wholesale Price – estimated to be £211 per MWh for electricity and £75 per MWh for gas, which is less than half of what was originally estimated for energy prices this winter. Any customer paying above this Supported Wholesale Price on the wholesale element of their price will automatically have it reduced for the six month period from October 2022 to March 2023.

Where customers are on default, deemed or variable tariffs they will receive a per-unit discount up to a maximum of the difference between the Supported Price and the average expected wholesale price during the course of the scheme. This maximum discount is estimated to be £405/MWh for electricity and £115/MWh for gas. However, even though non-domestic customers on default or variable tariffs will be paying reduced bills, these may still be subject to price increases and can change over time.

Where customers want to switch to a fixed contract or tariff the Government has said that it is working with energy suppliers to ensure that all customers are given the opportunity to switch over for the duration of the scheme.

The Government is also set to publish a review of this scheme after three months to inform future decisions about support after March 2023. The review will focus on identifying which non-domestic customers are most vulnerable and how the Government can continue assisting them with energy costs.

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