Confused about the government's energy bill relief scheme

The latest government scheme announced at the end of September, called the 'Energy Bill Relief Scheme (EBRS)' will see energy prices for non-domestic energy customers such as residential care providers, drastically reduced, shielding them from rising energy costs for a minimum of 6 months, starting October 1st, 2022.

As usual, the government hasn’t done a great job in explaining the new scheme, and many residential care providers and their managers have been left scratching their heads trying to figure out how the new scheme will benefit them and how the government energy bill subsidies will be applied and received.

TCD Energy understands that energy bills make up a significant proportion of care providers operating costs so we’ve designed a service which ensure you are not paying a penny more than you should on your business or commercial energy bills.

Did you know that an analysis undertaken recently across the sector confirmed that the average cost of energy per care home bed (surveyed across 55,000 beds) was around £750 per annum back in May 2021?

A later July 2022 analysis reported an increase to £3,950 per bed per annum, a 433% increase in costs to providers!

In August 2022, subsequent analysis revealed energy costs per bed increased again to over £5,166 per annum per bed!

We all know this simply isn’t sustainable so we’re working to help as many of the UK’s 17,000 residential care providers as possible mitigate the energy crisis impacts and ensure they receive the full complement of government energy bill subsidies they’re entitled to.

The EBRS scheme will provide energy bill relief for businesses including residential care providers, and discounts should be applied to your electricity and gas usage from 1st October 2022 through to the 31st of March 2023.

Summary

1. The government will cap the amount suppliers can charge customers for the ‘wholesale’ portion of gas and electricity unit prices, which equates to roughly 70% of total costs charged to customers per kWh.

2. Supplier charges can be added to the new rates, allowing for competition in the market and more variation in the final delivered unit rate than the household Energy.

3. Price Guarantee provided Standing charges are not included in the government cap currently and these will continue to be set by the suppliers to account for distribution, network maintenance.

4. The government supported price has been set at: - £211 per megawatt hour (MWh) for electricity - £75 per MWh for gas

For comparison, wholesale costs in England, Scotland and Wales for this winter are currently expected to be around:

- £600 per MWh for electricity - £180 per MWh for gas

5. This approach results in a wholesale energy cap for businesses (known as the Supported Price) which limits the maximum wholesale costs to about 21.1p kWh for electricity and 7.5p kWh for gas – less than half the wholesale price anticipated for this winter

6. To ensure consistency between the domestic and non-domestic schemes, the government supported price is based on the implied wholesale element of the Energy Price Guarantee for domestic customers. It will not be the same as the final per unit price paid by non-domestic customers, which will also reflect other costs such as network charges and operating costs, plus the impact of competition between suppliers.

7. Your energy suppliers will provide a discount on your gas and electricity unit prices, however calculating this is complicated and open to exploitation by suppliers. It’s extremely important that businesses have the support to calculate their expected discounts and hold suppliers to their obligations. Eligibility

The scheme will be available to everyone on a non-domestic contract including:

- Private businesses - Public sector organisations such as care homes, schools and hospitals - Voluntary sector organisations, such as charities

who are:

- On existing fixed price contracts that were agreed on or after 1st April 2022 - Signing new fixed-price contracts - On deemed / out-of-contract or variable tariffs - On flexible purchase or similar contracts

The amount of your bills will be reduced

The government will provide a discount on your gas and electricity unit prices. Unfortunately, it’s not at all straight forwards to calculate the discounts, and the government has done an awful job of providing clear and comprehensive guidance for customers to work out their discount entitlement.

To calculate your discount, the estimated 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 currently expected wholesale prices this winter. For all non-domestic energy users in Great Britain this government supported price has been set at:

- £211 per megawatt-hour (MWh) for electricity - £75 per MWh for gas

For comparison, wholesale costs in England, Scotland and Wales for this winter are currently expected to be around:

- £600 per MWh for electricity - £180 per MWh for gas

TCD Energy understands that energy bills make up a significant proportion of care providers operating costs so we’ve designed a service which ensures you are not paying a penny more than you should on your business or commercial energy bills! Our totally free support service for providers like you couldn’t be easier to access. We’re on your side and will fight your corner to make sure your company isn’t getting a raw deal or short-changed on your government energy bill relief support

Why might you need TCD Energy’s Support?

- You are confused about the new government scheme called the Energy Bill Relief Scheme and how this will subsidise energy costs for providers like you.

- You don’t know how you will receive government subsidies which should reduce your energy bills by up to 40%.

- You’re unclear about how to check and verify that your company is receiving its full entitlement of energy bill ££ relief from the government.

- You could be massively overpaying VAT on your energy bills, by up to 15%! Did you know that you could claim this back from your suppliers? We’ve recently recovered over £39k in VAT overpayments for a Residential Care Home group. How do I access the free TCD Energy support service?

- It couldn’t be simpler! Just send us your most recent electricity and gas bills for your residential care or nursing home to our team. Send your energy bills to info@tcdenergy.com

- Alternatively, if you want to ask us any questions or want to discuss the service before sending us your information, then call us on 0333 335 5200.

What will TCD Energy do with my information and how can they help?

- TCD Energy will review your electricity and gas bills to calculate the amount of discount that should be applied to your electricity and gas bills and compare this to the actual discount stipulated on your bill. If this is correct, we will provide you with the information you need to challenge your supplier and have the bill corrected and reduced

- A complete health check of your gas and electricity contracts will be completed. Did you know that if you are out of contract, you are very likely to be paying much more than you need to, even with the Energy Bill Relief discount? It’s important to move to a fixed tariff contract as soon as possible.

- A full review of your business and the correct VAT amount that you should be paying. We very often identify care providers who have been over-charged on VAT for a number of years. The great news is that TCD Energy can submit all of the paperwork to reclaim historical over-payments going back up to 4 years.

Don’t delay! It only takes 5 minutes of your time to get to grips with your energy arrangements and you could literally save ££thousands by seeking the help of trusted and reliable energy consultancy experts at TCD Energy.

- It couldn’t be simpler! Just send us your most recent electricity and gas bills for your residential care or nursing home to our team. Send your energy bills to info@tcdenergy.com

Alternatively, if you want to ask us any questions or want to discuss the service before sending us your information, then call us on 0333 335 5200. We know it’s tough out there and getting harder every day. We’re here to support you and answer any questions or queries you may have.

click here for more details or to contact TCD Energy