Businesses: Government to replace EBRS with Energy Bills Discount Scheme.
The government has announced (9 Jan 2023) a change to how non-domestic energy customers, such as businesses, SME, charities and public sector, will be supported with their bills. The current Energy Bill Relief Scheme (EBRS) will change from 1 April 2023 and become the Energy Bills Discount Scheme (EBDS) that will run until March 2024.
Under the new scheme, firms will get a discount on wholesale prices rather than costs being capped as under the current one. Heavy energy-using sectors, like glass, ceramics and steelmakers, will get a larger discount than others. The new scheme will start on 1 April 2023 and run until the end of March 2024.
The current EBRS provides a discount on wholesale gas and electricity prices for all non-domestic customers. The EBRS applies to fixed contracts agreed on or after 1 December 2021, as well as to deemed, variable and flexible tariffs and contracts.
Who is eligible for the Energy Bills Discount Scheme?
As with the original scheme, suppliers, like us, will automatically apply EBDS reductions to the bills of all eligible non-domestic customers. These include businesses, voluntary sector organisations, such as charities and public sector organisations such as schools, hospitals, and care homes. The EBDS applies to those who are:
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 standard variable tariffs
As per the current scheme the government will provide a discount on your gas and electricity unit prices. Eligible non-domestic consumers will now receive a per-unit discount to their energy bills during the 12-month period from April 2023 to March 2024, subject to a maximum discount. The relative discount will be applied if wholesale prices are above a certain price threshold. For most non-domestic energy users in Great Britain and Northern Ireland these maximum discounts have been set at:
electricity - £19.61 per megawatt hour (MWh) with a price threshold of £302 per MWh.
gas - £6.97 per MWh with a price threshold of £107 per MWh
The government says that the discount is calculated as the difference between the wholesale price associated with an energy contract and the price threshold. The discount is phased in when the contract’s wholesale price exceeds the floor price, until the total discount per MWh reaches the maximum discount for that fuel.
Some non-domestic energy users in Great Britain and Northern Ireland are particularly vulnerable to high energy prices due to their energy intensive and trade exposure, (referred to as Energy and Trade Intensive Industries or ETIIs), these sectors will receive a higher level of government support, subject to a maximum discount. The maximum discounts and price threshold for these sectors are:
electricity - £89 per MWh with a price threshold of £185 per MWh
gas - £40 per MWh with a price threshold of £99 per MWh
As with the original scheme, suppliers will automatically apply reductions to the bills of all eligible non-domestic customers. Eligible ETII customers will have to apply for the higher level of support. Further details on how this will work will be published by the government in due course.
We're working with the government on the details of how the new EBDS will affect our non-domestic customers. No action is required from customers. You do not need to apply, the EBDS will be automatically applied to eligible accounts (unless you are an ETII). If you receive a message and are unsure if it's genuine please visit our staying safe online web page.
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