The current Government support on utilities for business customers runs until the 31st March 2023. The EBRS was designed as a temporary six-month measure to protect non-domestic consumers from soaring energy costs, cutting the cost of power bills and providing them with the certainty they needed to plan through the acute crisis this winter. Following a review in December, the Government announced last week that additional support for business customers would be implemented from 1st April 2023.
The new scheme referred to as the Energy Bill Discount Scheme (EBDS) will run for 12 months from 01/04/2023 to 31/03/2024. As with the current EBRS, the new scheme will be available to everyone on a non-domestic contract including:
- voluntary sector organisations, such as charities
- public sector organisations such as schools, hospitals, and care homes
- on existing fixed price contracts that were agreed on or after 1 December 2021
- signing new fixed price contracts
- on deemed / out of contract or standard variable tariffs
- on flexible purchase or similar contracts
- on variable tariffs
As per the current scheme, the government will provide a discount on your gas and electricity unit prices and this will be applied to bills automatically by the suppliers. Eligible non-domestic consumers will receive a per-unit discount to their energy bills during the 12-month period from April 2023 to March 2024, subject to a maximum discount. The relative discount will be applied if your billed wholesale prices are above a certain price threshold. For most non-domestic energy users in Great Britain and Northern Ireland, these maximum discounts have been set at:
- electricity – £19.61 per megawatt hour (MWh) with a price threshold of £302 per MWh.
- gas – £6.97 per MWh with a price threshold of £107 per MWh
The discount is calculated as the difference between the wholesale price associated with an energy contract and the price threshold. The discount will be phased in when the contract’s wholesale price exceeds the threshold until the total discount per MWh reaches the maximum discount for that utility.
Recognising that some non-domestic energy users in Great Britain and Northern Ireland are particularly vulnerable to high energy prices due to their energy-intensive and trade exposure, (referred to as Energy and Trade Intensive Industries or ETIIs), these sectors will receive a higher level of support, subject to a maximum discount. Eligible ETII customers will have to apply for the higher level of support. Further details on how this will work will be published by the Government in due course. The level of support for each organisation will vary depending on the type and date of contract.
It is worth noting that a significant reduction in the Energy markets has lowered wholesale prices over the past few months, this will result in a reduction in the support available from the Government. The new scheme will be reflected in bills from April 23. The discount is likely to be lower than that seen over the winter period, due to lower wholesale energy rates over the past few months. The benefit will be seen by those that have longer-term contracts secured at a higher wholesale rate.
We hope this helps provide some reassurance to your clients to which the whole document can be located here Energy Bills Discount Scheme – GOV.UK (www.gov.uk).
Further updates will follow as information is received, should you have any questions in the meantime, please do not hesitate to a member of the procurement team at firstname.lastname@example.org or by telephone 01252 878722.