NEWS EXTRA Energy bill support to continue at reduced rate

The Energy Bill Relief Scheme (EBRS) will be replaced by an Energy Bill Discount Scheme (EBDS) which will run from 1 April 2023 until 31 March 2024. Businesses which have been receiving help under the EBRS will be eligible for the EBDS, and will not have to take any action –discounts will continue to be applied to energy bills automatically. However, the new rates of support are lower than under the current EBRS scheme.

The new scheme, set to launch in April, will apply a discount to wholesale energy prices but, if wholesale prices rise, it will be the business that takes the pain. From 1 April 2023 to 31 March 2024, all eligible non-domestic customers who have a contract with a licensed energy supplier will see a unit discount of up to £6.97/MWh automatically applied to their gas and a unit discount of up to £19.61/MWh applied to their electricity bills.

This will be subject to a wholesale price threshold, set with reference to the support provided for domestic consumers, of £107/MWh for gas and £302/MWh for electricity. This means that businesses experiencing energy costs below this level will not receive support. Customers do not need to apply for their discount; as with the current scheme, suppliers will automatically apply reductions to the bills of all eligible non-domestic customers.

The government first launched the package last September after prices were driven up in the wake of the pandemic and the war in Ukraine. Although wholesale gas prices are still three-to-four times higher than their long-term average, they are now below the level they were before the start of the Ukraine conflict.

Bigger manufacturers, which typically have higher bills, will receive a bigger discount, which the government has stated is equivalent to about £700,000 of support of 12 months.

According to the treasury these businesses are set to receive more help because, with competitors around the world, they are less able to pass on higher costs to customers. However, the British Chambers of Commerce has commented on the new scheme, calling it ‘seriously short’ for firms who are already struggling with prices at a 40-year high.

For businesses looking to save energy on their own premises, turning off lights and switching to LED bulbs can reduce energy costs; setting up cashback rewards, loyalty discounts or payment installation schemes to provide customers with crucial support in a challenging time may also make a difference.

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