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Background
On 21st September the Government announced their package of support for non-domestic energy consumers, including all UK businesses and the public sector; This covers WME customers such as local authorities, charities, hospitals, blue light organisations and schools / academies.
General Scheme Information
- The support will cover both flexible and fixed price contracts, as well as deemed / variable tariffs.
- Initially, from 1st October 22 – 31st March 23, discounts will be provided on the cost of wholesale gas and electricity.
- The Supported Price has been set at £211 / MWh for electricity and £75 / MWh for gas. To ensure consistency between the domestic and non-domestic schemes, the government Supported Price is the same as that of the Energy Price Guarantee for domestic customers.
- It is important to note that this discount applies solely on the commodity element of your invoice. For context, for electricity, the split between commodity and non-commodity is broadly 50/50.
- The Supported Price encompasses a reduction in green levies.
The impact on fixed, flexible and deemed contracts are slightly different, with more information set out below:
Fixed Price Contracts
- Non-domestic consumers who took out fixed term contracts from 1st December 2022 will qualify if the wholesale commodity rate is above the Supported Price. The discount amount will reflect the difference between the Supported Price and wholesale price on the day the contract was taken out.
Where applicable, suppliers will apply the reductions, and these will come though on invoices.
- Non-domestic consumers entering fixed price contracts after the 1st October will receive the same relief.
Flexible Contracts
- Similarly, to the fixed price contracts, consumers will qualify where the procured energy rate (monthly weighted average baseload price) is above the Supported Price. The discount amount will reflect the difference between the Support Price and procured wholesale price, but will be subject to a “maximum discount” of £345/MWh for electricity and £91/MWh for gas.
Deemed Contracts
- Non-domestic consumers currently out of contract on “deemed”, or “variable” tariffs will receive a discount to reflect the difference between the Support Price and the average expected wholesale price during the lifetime of the scheme. This will be subject to a “maximum discount” of £345/MWh for electricity and £91/MWh for gas.
- While lower because of the scheme, deemed or variable rates will still fluctuate. To achieve budget certainty, WME advises those currently on these contracts to consider putting in place either a fixed, or flexible contract, whereby you will receive the relevant reductions, as detailed above.
Oil
- For customers who use alternative fuels such as oil or LPG, the government has committed to providing the same levels of support, and we are awaiting details of this.
The Government has committed to publish a review of the scheme after 3 months to inform decisions on future support after March 2023. This review will specifically focus on how support reaches the most vulnerable non-domestic consumers moving forwards.
For further information on the Energy Bill Relief Scheme, please visit the link below.
WME does not believe many customers will qualify for the scheme, given procured rates are below the Support Price. We have written to the few customers who we think are impacted, and our bill validation service will ensure the correct discounted charges are levied where applicable.
For further information, or any help or guidance with your energy contracts, please contact us at: customerservices@westmerciaenergy.co.uk or 0333 101 4424
