FAQs: Government outlines plans to help cut energy bills for businesses

A new Government scheme has been announced to cut energy prices for non-domestic energy customers. It will apply to fixed contracts agreed on or after 1 April 2022, as well as to deemed, variable and flexible tariffs and contracts. It will apply 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.

Here are the FAQs our Members have asked since the announcement: 

Q. Does this support apply to businesses across GB and Northern Ireland as per the Energy Price Guarantee for households (noting the announcement for support for households in NI) 

Answer:  It applies GB-wide but in Northern Ireland’s case, a similar scheme will be established providing a comparable level of support. The designs of the GB scheme and the separate Northern Ireland scheme will be consistent and will offer an equivalent level of support, but the impact on users will vary in Northern Ireland in particular since there are only limited numbers of fixed price contracts in the market.  Further detail will be released in due course. 

Q. What additional support can my members provide to evidence their vulnerability during the 3-month review period? 

Answer:  The Government will publish a review of the scheme in 3 months. This review will consider how best to offer further support to customers who are the most vulnerable to energy price increases. These are likely to be those who are least able to adjust, for example by reducing energy usage or increasing energy efficiency.  

Specifically, the review will consider: 

• How effective the scheme has been in giving support to vulnerable non-domestic customers; 
• Which groups of non-domestic customers (by sector, size or geography) remain particularly vulnerable to energy price rises, taking into account the latest price position and forward curves, alongside other cost pressures. 
• How to continue supporting these customers – either by extending the existing scheme for some users, or replacing with a different scheme.  

Continuing support to those deemed eligible would begin at the end of the initial 6-month support scheme, without a gap.  

It is important that users who are less likely to be considered vulnerable to energy price increases (particularly larger businesses that are not energy-intensive) use the six months support provided by the scheme to identify measures they can take to protect themselves against high energy prices.  

Q. Is there any further advice to give to businesses that fixed a rate before April 2022?  

Answer:  The scheme will apply to those on fixed price contracts agreed on or after the 1 April, customers signing new contracts or those on default/deemed or out of contract tariffs or flexible contracts for energy supplied through the electricity and gas grids. 

The scheme has been designed to reflect wholesale prices in the period before the recent unprecedented rise in energy prices. Following an assessment of historic wholesale prices, we have set this at 1 April 2022. 

There are also currently a number of advice and support schemes that businesses may be eligible for to help to improve the energy performance of your buildings and processes and lower their energy bills. Businesses can search for local schemes that provide both advice and grants on gov.uk, here:  https://www.gov.uk/business-finance-support. 

For further advice, they can visit the UK Business Climate Hub, to find practical steps on cutting emissions and saving money. If they are based in England, they may also be able to access support via local Growth Hubs, who they can get in touch with to find out more. 

Q. Should home based salons be advised to claim under the household or the business scheme? 

Answer:  Those who are on domestic tariffs will receive support through the domestic scheme. Those on non-domestic tariffs will receive support through the non-domestic scheme. The level of support within both schemes is comparable. Businesses should check with their supplier if they are not sure which tariff they are on. 

Q. What happens with pre-paid meters? Presumably they will see a change in tariffs too? 

Answer:  Yes. The Energy Bill Relief Scheme will be available to all eligible business, voluntary sector and public sector organisations who are on existing fixed price contracts that were agreed on or after 1st April 2022, those who are signing new fixed price contracts, those that are on default or variable tariffs and those that are on flexible purchase contracts.