Kwasi Kwarteng copy

Kwasi Kwarteng

The government has announced updates to the Energy Bill Relief Scheme, increasing the eligibility criteria for businesses to benefit from the scheme.

Businesses which renewed their contracts at any point after 1st December 2021 will now be eligible for support. Previously the cut-off date was 1 April 2022.

The support provided to business comes in the form of a wholesale price set at 21.1p per kWh for electricity, and 7.5p per kWh for gas. This is the supported wholesale price, which makes up part of the overall kWh rate that a business pays.

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 34.5p/kWh for electricity and 9.1p/kWh for gas.

Businesses on variable / flexible contracts will need to choose whether they move to fixed contracts. ACS advised that 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 and businesses do not have to take out a new contract or change their contract for appropriate reductions to automatically be applied to their bills.

The Energy Bill Relief Scheme is in effect for six months from October 2022, and will be reviewed after three months to consider which sectors need support after the initial period. PRA and ACS are both working with the Department for Business, Energy and Industrial Strategy to highlight the need for their members to receive longer-support.

Introducing the new emergency powers chancellor Kwasi Kwarteng said: “We are protecting people, holding down inflation and preventing Putin’s energy price hike from causing long-term harm to our economy, by supporting businesses.”