UK Government – Energy Bill Relief Scheme: Customer Update

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Posted on: 

20 January 2023

Energy Bill Relief Scheme

This is our dedicated web page for the latest news and information on the Energy Bill Relief Scheme (EBRS) introduced by the Government to provide non-domestic users with support on rising energy costs. The existing scheme began on 1st October 2022 and ends on 31st March 2023. If you are a new or existing SmartestEnergy Business customer, we've covered everything you need to know in this article.

Last updated: 20th January 2023

 
New – Energy Bill Discount Scheme (EBDS)
(1st April 2023 to 31st March 2024)

On 9th January 2023, the government announced the new Energy Bill Discount Scheme (EBDS), to replace the existing Energy Bill Relief Scheme (EBRS). This will provide support to businesses over the next 12 months, from 1st April 2023 to 31st March 2024. The EBDS will offer the same eligibility criteria as the EBRS, and for now there is nothing you need to do.

Whilst we continue to deliver the EBRS to our customers, we will work closely with the Government to understand the news scheme. We will be in touch with further details on what this means for your business they have been released.

You can find out more about the new EBDS scheme via the Government website here

 

 
Existing – Energy Bill Relief Scheme (EBRS)
(1st October 2022 to 31st March 2023)

The Government’s Energy Bill Relief Scheme (EBRS) provides support to businesses, charities and public sector organisations whose energy bills have been significantly inflated from the global energy crisis.

The Energy Prices Bill, introduced in Parliament on the 12th October 2022, provides the legislative footing to ensure that UK consumers and businesses receive support with their energy bills via the EBRS. It means that all non-domestic energy users on fixed contracts agreed on or after 1st December 2021 (previously 1st April 2022), as well as those on default or variable tariffs, receive a discount on wholesale electricity and gas prices over the Winter period. It will run for an initial six-month period, from 1st October 2022 to 31st March 2023.

 
What do I need to do?

If you are a new or existing customer, you do not need to apply to the scheme. For those eligible, we will automatically apply the discount set out by the Government, starting from your SmartestEnergy Business October invoice, which will typically be sent early November. This will be clearly itemised so that you can see exactly how much discount your business is receiving under the scheme.

 
How does the scheme work?

The price you currently pay for your electricity and gas comprises of energy (wholesale) and non-energy (pass-through) costs. It’s important to note that the scheme only applies to the energy wholesale costs

For fixed priced contracts, the discount is the difference between the Government Supported Price for the wholesale energy and the Relevant Wholesale Price when the contract was agreed. The Government Supported Price is the rate that the Government have deemed appropriate for customers to pay for their wholesale costs. This is fixed at 21.1p/kWh for electricity and 7.5 p/kWh for gas. For clarity this does not mean, for example, that your retail unit price will be set at 21p/kWh.

The Relevant Wholesale Price will differ based on when the contract was agreed, reflecting movements in the wholesale electricity market.

For default or variable contracts, the discount will be the difference between the Government Supported Price and the Relevant Wholesale Price, subject to the maximum discount which is 34.5p/kWh for electricity and 9.1p/kWh for gas.

The Government has also introduced a floor price (set at the Government Supported Price) to ensure consistency of support and avoid unintended consequences. This means any retail unit price for all costs will not fall below the Government Supported Price once discounts have been applied.

In all cases, the total discount you receive will vary depending on the amount of energy you use during this period.

 
Need further guidance?

To further support your business, we have created some useful resources, including advice on how to reduce your energy bills, additional financial support and understanding the impact of wholesale energy costs. For more information, please take a look at the following articles:

> Energy Saving Advice for Small Businesses

> Energy Bills Payment & Support

> Wholesale Energy Costs Explained

Finally, please be mindful of illegitimate claims and/or scams if you receive any communications from 3rd parties offering services to apply for the scheme, especially those requesting bank details.

 
Want regular updates?

We will keep you posted of any updates via this dedicated web page and if you are an existing SmartestEnergy Business customer, continue to contact you directly (by email/post) with important EBRS news.

 
Additional customer FAQs

If you agreed a fixed contract on or after 1st December 2021, or you are currently on a deemed or variable tariff then you are eligible for the discount. If you do not meet the criteria set by the Government, then you will not be eligible.

No, you don’t need to apply, if your business is eligible it will automatically be added to your account and show on your October bill (sent early November) onwards.

That depends on the type of tariff you are on and what the cost of wholesale energy was at the time when your contract started. We are working with the Department for Business Energy and Industrial Strategy (BEIS) to fully understand their methodology to apply the discount to our customer bills.

It’s important to note that your total energy bill is made up of the wholesale cost and other non-commodity costs, also known as pass-through costs. The EBRS only applies to the wholesale part of the bill. The discount will appear as one-line adjustment detailed on the breakdown of charges page of your SmartestEnergy Business invoice. It will show the total consumption, p/kWh discount and the total value of the discount. The item description will be clearly labelled ‘Energy Bill Relief Scheme’.

If you currently pay for your electricity by Budget Plan, the EBRS discount could mean that we need to adjust your fixed payment amount. We are in the process of reviewing all Budget Plans for those eligible under the scheme and will automatically make any necessary adjustments. You will receive a separate notification from us if this is the case, confirming your new Budget Plan payment amount. In the meantime, please continue to pay for your electricity in line with your current schedule.

You will be eligible for the maximum discount available under the scheme, so you will start to see a reduced bills from your October bill onwards. Rates will still remain variable and over time could change and may be subject to price increases. You might want to consider switching to a fixed contract, our Customer Care Team would be happy to discuss your options with you.

Please get in touch with our Customer Services Team on 01903 703400 or email customerservices.business@smartestenergy.com. We will check your eligibility for a discount against the criteria set by the Government and if required apply and backdate any discounts owed.

By working directly with the Government and the guidance set by the Department for Business, Energy and Industrial Strategy (BEIS), we will ensure our customers get the appropriate support on their bills this Winter. The process will also be audited by BEIS to ensure we are issuing our customers with the correct amount of discount. For reference the discounted rates published by the Government can be viewed here.

There is additional support this Winter for businesses that are identified as Qualifying Financially Disadvantaged Customers, based on the Government guidance. These QFDC customers will benefit from a further reduction in their energy bills and we have since contacted those that are eligible to advise of their reduced unit rates for the qualifying period.

The Government has advised that there are instances where the Relevant Wholesale Price has been set at a rate lower than the Government Supported Price. This means that some customers who agreed a fixed contract on or after 1st December 2021 will not be eligible for support. In this case your invoice would not include any discount.

It’s absolutely fine to go ahead as planned, if you agreed the contract from the 1st December 2021, you will be eligible for the scheme and therefore qualify for the discount on your bills, for the 6 month period as advised by the Government.

We have created some useful resources, including advice on how to reduce your energy bills, additional financial support and understanding the impact of wholesale energy costs. For more information on this, please visit our main Info Hub here

As a Supplier, SmartestEnergy Business Limited will provide data to the Department for Business, Energy & Industrial Strategy (BEIS) under the Energy Bill Relief Scheme (EBRS). The EBRS supports businesses and may capture personal data for small or micro businesses, for example, those who are operating businesses as self-employed and not operating as a limited company.

For full details of this processing activity, the relevant BEIS Privacy Notice can be found here and the SmartestEnergy Business Privacy Notice can be found here.

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