Energy Bills Discount Scheme
The Government has introduced the Energy Bills Discount Scheme. This scheme will apply a discount to energy usage between 1 April 2023 to 31 March 2024, based on the wholesale price of energy.
Wholesale prices are what energy suppliers pay to purchase the energy. They are not retail prices, which is what end-users pay. Retail prices include other costs such as supplier margins, network costs and green levies.
The support could reduce bills for customers who agreed a Fixed contract on or after 1 December 2021.
You entered a Fixed contract so may be eligible for the Energy Bills Discount Scheme.
We’ll automatically apply the price reduction to your bill which is based on the wholesale price of electricity. The discount will reflect the Government Supported Price of £302/MWh (30.2p/KWh).
If the wholesale price was below the Government Supported Price for the day you signed your contract you will not receive a discount.
More information regarding EBDS and eligibility can be found on the Government website.
How will the discount be applied
The amount of discount provided is dependent on the day your contract price was fixed. This “price-fix date” is the date when we locked in your unit rate and processed your contract.
The Government has published the discounts on their website. We will apply the discount to your unit rate, which will not go below the Government Supported Price of £302/MWh (30.2p/KWh).
Here's an example of how it will appear on your bill:
Fixed contracts with no passthrough elements
For single unit rate customers, the unit rate will have the relevant discount applied, amending for the Government Supported Price of £302/MWh (30.2p/KWh) where relevant.
For multi-rate customers we’ll calculate a single weighted average unit and will use that to determine night/day weightings.
Fixed contracts with passthrough elements (commodity fixed, TPCs passthrough)
Where your Third Party Costs (TPCs) are passed through directly, the charges appear separately on the bill. To calculate whether you're eligible for a discount we first calculate your Weighted Average Price, taking into account your consumption and the cost of all of the TPCs.
We then apply the appropriate discount against that calculated total unit rate, ensuring it doesn’t breach the Government Supported Price of £302/MWh (30.2p/KWh).
What if you have additional energy market exposure?
(The Energy and Trade Intensive Industries and The Heat Network Operators)
If you’ve entered into any arrangements outside of your supply contract to manage risks associated with wholesale prices and are expected to use more than 0.5GWh a year or use more than 0.5MW in any half hour, then you need to be aware of part 4 of the EBDS Regulations. You can find more details on the Government website.