The Government recognises the impact rising energy prices have on businesses of all sizes. Ofgem, the independent energy market regulator, and the Government are in regular contact with business groups and suppliers to understand the challenges and provide support. Our priority is that costs are managed and supplies maintained. 

You will be reassured to know that through the new Energy Bill Relief Scheme, the Government will provide a discount on wholesale gas and electricity prices for all non-domestic customers whose current gas and electricity prices have been significantly inflated in light of global energy prices. This will include all UK businesses, the voluntary sector like charities and the public sector such as schools and hospitals. This support will be equivalent to the Energy Price Guarantee put in place for households.  

This will see the Government set a Supported Wholesale Price which is a discounted price per unit of gas and electricity. This price is expected to be £211 per MWh for electricity and £75 per MWh for gas, less than half the wholesale prices anticipated this winter. 

It will apply to fixed contracts agreed on or after 1 December 2021 as well as to deemed, variable and flexible tariffs and contracts. It applies 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. 

By January 2023, the Government will bring forward proposals to support energy bills beyond April 2023. Full details will be made available then, but I know that the Government will focus this support where it is needed most for energy intensive industries, small businesses, and the hospitality sector. 

I realise that these high prices might have significant implications for your business. Ofgem has robust policy in place to protect commercial customers. If a business’ energy supplier fails, Ofgem’s safety net will ensure continuity of supply and identify a suitable new supplier through a competitive process. A business will then be able to view different tariffs before committing to a new contract. A business on a longer-term contract may have little exposure to the current high wholesale prices. However, for those companies without longer-term contracts, Ofgem makes several recommendations: comparing supplier prices; contacting suppliers to agree a payment plan; and to check for business finance schemes from suppliers, the Government or local authorities. 

Off-grid businesses 

If you are not connected to either the gas or electricity grid, equivalent support will also be provided for non-domestic consumers who use heating oil or alternative fuels instead of gas. Further detail on this will be announced shortly. 

Contracts agreed before December 2021 

As you may be aware, the Energy Bill Relief Scheme is available for commercial energy contracts that were signed on or after 1 December 2021. As I understand it, if you signed your fixed rate contract before 1 December 2021, you would not have been exposed to the recent rises in wholesale prices, so you will not be eligible for support under the scheme. 

Eligibility 

The scheme will be available to everyone on a non-domestic contract including businesses, voluntary sector organisations, such as charities, and public sector organisations such as schools, hospitals and care homes. 

These buildings must be 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 variable tariffs or, on flexible purchase or similar contracts.