HMG Energy bills support factsheet: 8 September 2022, Published 8 September 2022

Planeteer

Official government factsheet on today's energy guarantee declaration: https://www.gov.uk/government/publications/energy-bills-support/energy-bills-support-factsheet-8-september-2022:

"The government has set out decisive action to support people and businesses with their energy bills, and tackle the root causes of the issues in the UK energy market through increased supply – ensuring the country is not left in the same position again.

Support for households

The government has announced the following immediate, short-term action to support households:

Replacing the price cap with a new Energy Price Guarantee

The Energy Price Guarantee will ensure that a typical household in Great Britain pays an average £2,500 a year on their energy bill, for the next 2 years, from 1 October 2022.

The consumer saving will be based on usage, but a typical household will save at least £1,000 a year (based on current prices from October). Energy suppliers will be fully compensated for the cost of the Energy Price Guarantee.

£150 of this £1,000 a year saving will be delivered by temporarily suspending green levies. These costs will be transferred to the Exchequer, so customers don’t bear the costs, but benefit from the low-carbon electricity generation.

This is in addition to the £400 Energy Bills Support Scheme. This will be paid in 6 instalments from October.

The most vulnerable UK households will also continue to receive £1,200 of support provided in instalments over the year.

An additional discretionary fund will be available for those households who are outside of the schemes. For example, households not on standard gas / electricity contracts.

How the Energy Price Guarantee will be applied to energy bills

You do not need to apply, and there’s no need to contact your energy supplier.

For consumers in England, Scotland and Wales who pay for their energy through a monthly, quarterly or other regular bill, the Energy Price Guarantee will be applied when your bill is calculated.

Because of the different energy system in Northern Ireland, and the different ways the global energy market impacts different fuel types, the Energy Price Guarantee will have to work a bit differently for some consumers. The government is working with Northern Ireland partners including the NI Utility Regulator and NI energy suppliers to ensure that equitable level of support can be delivered to consumers and businesses in Northern Ireland.

The Energy Price Guarantee limits the amount you can be charged per unit of gas or electricity, so your exact bill amount will continue to be influenced by how much energy you use

If you’re on a pre-payment meter

For GB pre-payment meter customers, the Energy Price Guarantee will be applied to the rate you pay for each unit of energy, so the money you put on the meter will last longer than would otherwise have been the case this winter.

As is the case with the ‘price cap’ under the Energy Price Guarantee there will continue to be a small difference between the unit cost for a pre-payment meter customer and other bill payers.

If you’re on a fixed tariff

If you’re on a fixed tariff, the Energy Price Guarantee will protect you in the same way that it protects standard variable tariff (SVT) customers.

If you’re not connected to the grid

Those households not on standard gas or electricity contracts, such as those living in park homes or on heat networks – and so outside the scheme – will be no worse off and will receive comparable support through a discretionary fund.

If you pay for electricity as part of your rent

The Energy Price Guarantee is applied per unit of gas or electricity used for households with a domestic electricity connection, so will be applied if your landlord has a domestic electricity contract with a licensed electricity supplier.

Your landlord may be reselling the electricity to you based on your usage, in which case:

• they must comply with the maximum resale price rules which say they must not make a profit
• the maximum resale price for electricity is currently set at the same price as that paid by the person reselling it (see Ofgem’s guidance on ensuring customers are being charged no more than they should)

Your landlord may charge an ‘all inclusive’ rent, where a fixed cost for energy usage is included in your rental charges, in which case:

• they are encouraged to come to an agreement with you on the Energy Price Guarantee in line with the arrangement in your tenancy agreement, and we are exploring a full range of options to ensure this happens, including using the planned emergency legislation.

• the landlord’s fixed charge may already provide you with similar protection from the impact of energy price increases

Example savings based on your type of home

Under the new Energy Price Guarantee, the average house will save an average of £1,000 and the average flat will save £700.

Typical Bills - 2019 median consumption (Dual fuel, annual basis)

Property type	Under October price cap	Under government Energy Price Guarantee	Difference
All dwellings	£3,550	£2,500	£1,050
Houses	£3,800	£2,650	£1,150
Detached	£4,700	£3,300	£1,400
Semi Detached	£3,800	£2,650	£1,150
End Terraced	£3,500	£2,450	£1,050
Mid Terraced	£3,300	£2,350	£950
Bungalow	£3,500	£2,450	£1,050
Flats	£2,450	£1,750	£700
Converted flat	£2,750	£1,950	£800
Purpose built flat	£2,400	£1,750	£650

Support for businesses and non-domestic properties

Providing support to businesses

While the majority of UK non-domestic customers are on fixed price energy deals, some are not. Businesses did not benefit from the Ofgem price cap and there was a risk that some would fall through the gap, unable to fix their energy price and unable to access the kind of support we are making available to households.

A new 6 month scheme for businesses and other non-domestic energy users (including charities and public sector organisations like schools) will be offered support as is being provided for consumers.

After this initial 6 month scheme, the government will provide ongoing focused support for vulnerable industries.

There will be a review in 3 months’ time to consider where this should be targeted to make sure those most in need get support.

Further details will be published shortly.

Reform to address long-term issues in the UK’s energy sector

Reducing the cost

While the intervention will be funded by the government, action is being taken to significantly reduce the cost over time, including:

Energy Supply Taskforce

A new Energy Supply Taskforce – led by Madelaine McTernan who headed up the UK’s successful Vaccine Taskforce – has begun negotiations with domestic and international suppliers to agree long-term contracts that reduce the price they charge for energy and increase the security of its supply. The government will negotiate with renewable producers to reduce the prices they charge as well.

Energy Markets Financing Scheme

HM Treasury are announcing a joint scheme, working with the Bank of England, to address the extraordinary liquidity requirements faced by energy firms operating in UK wholesale gas and electricity markets. The Energy Markets Financing Scheme will enable stability to both energy and financial markets, and the economy, and reduce the eventual cost for businesses and consumers. The scheme will provide short term financial support and will be designed to be used as a last resort.

Increasing supply

Learning from the mistakes of the past, the government is taking action to accelerate domestic energy supply, increase our energy resilience and achieve our ambition to make the UK an energy exporter by 2040:

• launch a new oil and gas licensing round as early as next week, expected to lead to over 100 new licences.
• lift the moratorium on UK shale gas production - enabling developers to seek planning permission where there is local support, which could get gas flowing in as soon as 6 months
• drive forward the acceleration of new sources of energy supply from North Sea oil and gas to clean energy like nuclear, wind and solar
• continue progressing up to 24GW of nuclear by 2050, with Great British Nuclear helping to set direction of getting new nuclear projects online in the UK
• undertake fundamental reforms to the structure and regulation of energy market through recommendations from a new review of the UK energy regulation
• launch a review to ensure we are meeting our net zero 2050 target in an economically-efficient way, given the altered economic landscape; chaired by Chris Skidmore MP and reporting by the end of this year, it will ensure delivering the target is not placing undue burdens on businesses or consumers

Other help

Find out what other payments are available that can help with your energy bills."