The government plans to replace the Energy Bill Relief Scheme (EBRS) with the Energy Bill Discount Scheme (EBDS) on April 1, 2023.
This new plan represents a significant reduction in EBRS. The current scheme is worth £18bn, while the alternative would be limited to his £5.5bn. It will operate until the end of March 2024.
Let’s take a closer look at what’s included in our new support program.
Are you eligible for the electricity bill discount system?
Business operators eligible for the electricity rate discount system are as follows.
- For existing fixed price contracts entered into after December 1, 2021
- Enter into a new fixed price contract
- Deemed/non-contractual or standard variable tariffs
- About flexible buying or similar agreements
- For variable ‘Day Ahead Index’ (DAI) duties (Northern Ireland schemes only)
Businesses are set to receive per-unit discounts on energy bills up to the maximum discount amount for 12 months. A relative discount is applied when the wholesale price exceeds a certain price threshold. For most businesses these are:
- Electricity – £19.61 per megawatt hour (MWh) with a price threshold of £302 per MWh.
- Gas – £6.97 per MWh, price threshold of £107 per MWh
Energy-intensive and trade-intensive industries Get more support. Here are the maximum discounts and price thresholds for these sectors:
- Electricity – £89 per MWh, £185 per MWh price threshold
- Gas – £40 per MWh, price thresholds of £99 per MWh
Most companies don’t need to do anything. Energy providers automatically apply discounts to eligible customer bills. Discounts are applied in pence per kilowatt hour.
However, energy and trade-intensive sectors should apply for greater support. The government has yet to confirm the details.
See details and examples on the government website
What is the difference between the utility bill discount system and the utility bill reduction system?
The Federation of Small Businesses (FSB) said that 370,000 (28%) of SMEs that signed fixed-price energy contracts last year were either downsizing, rethinking their business models, or shutting down altogether after current energy support ended in April. I have found that you may be forced to .
This gives an example of a pub paying £24,528 a year for energy under the current subsidy scheme. The contract, signed last August, calls for 48,000 KwH for electricity and 192,000 KwH for gas, while the new scheme will pay £82,539. You will receive £60,000 relief against an estimated £85,000 claim through EBRS. Under EBDS, you will receive just over £2,000 in support.
The group is calling for small businesses to be allowed to renegotiate or “blend and extend” energy contracts amended last year to take advantage of the lower wholesale prices now available.
Tina McKenzie, Policy Chair of the Federation of Small Businesses (FSB) said:
“Within a week of government support being curtailed, this group of vulnerable small businesses will see their bills return to higher interest rates. will have to raise prices to deal with rising bills, accelerating inflation.
“Our message to governments is: Show that the SME community is treated as an equal partner in this energy price crisis. We can keep dependent jobs and communities off the cliff.”
Should you opt for fixed-price energy trading?
If your current energy contract is coming to an end, it’s a good time to look around and establish the best fixed rate.
Ed Whitworth, Head of Energy Performance Bionicsaid:
“By fixing the price, fixing a consistent price for energy ensures bill stability in a market that is still uncertain. , the discount rate will also be lower.”
References
Where to Find Green Small Business Grants