Yorkshire business experts discuss ‘substantial move’ of the energy price cap for non-domestic customers amid soaring cost of living prices

The new Energy Bill Relief Scheme (EBRS) will see energy prices for non-domestic customers, such as businesses, charities and public sector organisations, be cut by almost half of the original rates.

To start with, discounts will be applied to energy usage between October 1, 2022 and March 31, 2023 and a review will be published by the government in three months’ time to inform decisions on future support.

Those eligible for the scheme are businesses, voluntary sectors such as charities and public sectors such as schools, hospitals and care homes who are on existing fixed price contracts agreed on or after April 1, 2022, those signing new fixed price contracts, on deemed or out of contract or variable tariffs or those on flexible purchase contracts or similar.

However, non-domestic energy customers who are on fixed contracts that were agreed outside of the above date are not eligible for the EBRS.

The government will offer a discount on gas and electricity unit prices. The rough wholesale portion of the unit price you would be paying this winter will be compared to a baseline ‘government supported price’ which is lower than current predicted wholesale prices this winter.

For all non-domestic energy users in Great Britain the government supported price has been set at £211 per megawatt hour (MWh) for electricity and £75 per MWh for gas.

To compare, the wholesale costs in England, Scotland and Wales for this winter are currently expected to be roughly £600 per MWh for electricity and £180 per MWh for gas.

The review conducted in three months’ time will particularly focus on pinpointing the most vulnerable non-domestic customers and how the government can continue to support them with energy costs.

We spoke with the FSB Yorkshire, Humber and the North East, a company of business experts who offer members business services including advice, financial expertise and support, about how this scheme could impact businesses in Yorkshire.

Development manager at FSB Yorkshire, Barney Mynott, told The Yorkshire Post: “This is a substantial move and will likely be of considerable help to small firms which have been crying out for months for measures to limit the pain caused by spiralling energy prices.

“For Yorkshire, the promise of equivalent support for those using heating oil is great, as this accounts for a large number of small businesses.

“Today’s announcement will give certainty for the next six months, but a tough year remains ahead for many small firms.”

While in the short term the scheme could bring relief for many small Yorkshire businesses, charities, schools, care homes and more, Mr Mynott warns that it’s not over for them yet.

“For many business owners, they are not going to know exactly what this means until they receive their energy bill in November,” he said.

“However, it will mean lower bills. Business owners were telling us about their bills trebling or more. This support will help by capping the rises.

“But the surging prices of energy means that most businesses will still be paying around twice as much as last year.

“The ones who may not benefit are those who signed fixed contracts after prices rose but before April. They are excluded from the scheme. They may need additional support.”

The scheme will work similarly to the domestic energy price cap enforced since 2019 but this is not a total cap.

“Like your own household bill, this is not an absolute cap; the more energy you use, the more you will pay. Businesses will still want to look at ways to reduce energy use. Businesses who need to use more energy will still feel a real squeeze this winter,” Mr Mynott said.

“It is only for six months. After that, bills could again spiral if wholesale prices do not come down.

“That is why it is important the government reviews this scheme and, if necessary, provides further support to protect businesses, charities, schools and other non-domestic energy users.”