Shell Energy Business Industry informationEnergy Bill Relief Scheme (EBRS)

Energy Bill Relief Scheme (EBRS)

IMPORTANT – the full details of this scheme are still in development by government and are subject to change.

What is the official name of the scheme?

This scheme has been called the ‘Energy Bill Relief Scheme’ (EBRS) and it covers help for businesses and other non-domestic energy customers.

What types of businesses are eligible for this support?

This support is targeted at all non-domestic energy consumers, this includes businesses, charities, and public sector bodies. If a customer isn’t eligible for the domestic tariff cap and energy bill support scheme, they are likely to be eligible for this support (unless they are a generator, see below). This support will be provided automatically by energy suppliers.

The only exclusions are if customer uses gas to produce electricity which is then supplied to the National Grid, or store electricity in a battery which is then exported to the grid. If you think you fall into this excluded category then you should consult The Energy Bill Relief Scheme Regulations 2022 and let us know, we can then remove you from the scheme.

What sort of customers and contracts will be eligible for support under this scheme?

All non-domestic customers may be eligible for support under this scheme. This includes fixed, flex and deemed and extended supply contracts.

Non-domestic customers on a fixed contract will be eligible for this scheme if they are on a fixed price contract that was agreed on or after 1 December 2021. Originally this date was published by government as 1 April 2022, it has since been extended to include more customers.

All deemed and extended supply customers will be eligible for this scheme. Flexible energy supply contract customers will be eligible however, their specific discount will depend on their individual circumstances.

Is it possible to opt-out of the Energy Bill Relief Scheme?

Yes, it is possible to opt-out from receiving support from the Energy Bill Relief Scheme. If you wish to opt-out, please get in contact with us and we can arrange this for you. Customers can choose to opt-out for any specific month, or the whole scheme. Customers must be either fully in (this happens automatically) or out of the scheme for each relevant month. It is not possible to receive a reduced EBRS payment in a month e.g. 50%.

How and when will the support be applied to my invoice?

The support will show as a discount on customer’s invoices from October 2022 (billed in November) and continue until 31 March 2023.

Does the relief cover all types of supply contracts?

All energy supply contract options are included in the Energy Bill Relief Scheme. This includes fixed, flexible, pass-through and those on deemed and extended supply rates.

FIXED ENERGY SUPPLY CONTRACTS

How much relief will I receive?

For fixed contract customers, the discount you receive will depend on when you signed your energy supply contract. The amount will vary considerably. If you secured when wholesale prices were more favourable, you’re likely to be on better rate compared to if you secured a contract at a different time. This means that you may receive a zero or relatively lower discount rate. However, if you secured your contract when wholesale prices were at their highest, it’s likely your discount will be higher. The price you pay will also be subject to a floor meaning that the discount you receive won’t result in your unit rate- dropping below the government support price.

Full details of the recently published rates by government can be found on their website https://www.gov.uk/government/publications/energy-bill-relief-scheme-discounts-for-fixed-default-and-variable-contracts

I’ve heard about a Floor Price - what is it and what does it mean for my business?

The government has introduced a floor price. This ensures the discount does not result in prices falling below the government supported priced of 21.1p/kWh for electricity or 7.5p/kWh for gas. This means that the effective retail unit price for a customer’s gas and electricity (inclusive of wholesale, network, policy and supplier costs, but exclusive of VAT and Climate Change Levy) does not fall below the government supported price for each once their discounts have been applied. This is to ensure consistency of support and avoid unintended consequences in some circumstances, such as a customer’s retail unit prices turning negative after a discount is applied under scheme.

FLEXIBLE ENERGY SUPPLY CONTRACTS

What is the discount if you have a flexible energy supply contract?

If you’re on a flexible supply contract, your discount will depend on the difference between your monthly weighted average price (determined by your individual hedging approach) and the government supported price. In this case, the maximum support available per unit of energy will also be limited by the maximum discount.

The government is encouraging customers on a flexible contract to continue to procure energy as normal. The weighted average price will consider the net value of fixes and unfixes for the given billing period, e.g. any gains made from unfixing volumes will be reflected in a lower customer weighted average price.

As with fixed contracts, a floor price will be introduced. This ensures the discount does not result in prices falling below the government supported price of 21.1p/kWh for electricity or 7.5p/kWh for gas. Maximum discounts of 34.5p/kWh for electricity and 9.1p/kWh for gas will be applied.

What is the impact on trading flexible energy supply contracts?

BEIS has requested that we bring the following important information to the attention of flexible supply customers:

Non-domestic suppliers and consumers must not profit from the scheme other than for its intended purpose of providing relief on necessary energy bills. Any such activity will result in support being refundable to the government and further penalties may apply.
Flexible customers should continue to contract and hedge in line with their normal practices to avoid market disruptions.
Cashing in or changing contracting positions or financial instruments subsequent to the announcement of the scheme in order to increase the level of bill support, or in order to become exposed to energy costs expected to be eligible for support, is expected to result in that support being refundable to government. Further details will be available in due course.

DEEMED AND EXTENDED SUPPLY CONTRACTS

Should deemed and extended supply customers sign a new fixed deal?

Customers on deemed or extended supply rates will still be subject to a discount; however, their overall energy costs are still expected to be higher. In addition, these customers may still have exposure to high wholesale costs as the amount of support will be capped by government and deemed/extended prices are subject to change. The government is actively encouraging customers on deemed rates to explore fixing a contract to reduce their exposure to price volatility.

For deemed and extended supply contracts the discount will be a set amount. The electricity and gas discounts have been published by government as a set amount for the duration of the scheme. This has been set at the maximum discount (but may be subject to change within the scheme if wholesale prices drop significantly).

If you are on a deemed or extended supply contract, please get in touch with us on 0330 088 2679 or SEUKL-uksales@shell.com as we may be able to offer you a short-term fixed contract for the duration of the scheme. This could help limit your exposure to changes in wholesale costs for the duration of the scheme. We recommend that you take a meter reading before contacting us to secure a contract. This will help to ensure a smooth transition process.

What are the discounts for customers on deemed and extended rates?

The government has indicated that customers on deemed and extended rates will receive maximum discounts of 34.5p/kWh for electricity and 9.1p/kWh for gas, subject to the floor price.

Are customers on deemed and extended rates eligible for further support as part of the Energy Bill Relief Scheme?

The Energy Bill Relief Scheme Regulations require suppliers to calculate any reduction in credit and payment risk due to the scheme. Suppliers are then required to provide this additional reduction to any Qualifying Financially Disadvantages Customers (QFDCs). QFDCs are any customers that are on deemed or extended supply rates who do not have outstanding bills greater than 28 days. This additional reduction must be included for any consumption from 11 November 2022 and for the duration of the scheme.

Shell Energy has automatically categorised all deemed and extended supply customers as QFDC and all relevant customers will receive this additional discount. This may result in the rates that you see on your bills being less than those previously communicated to you. Shell Energy has also backdated all relevant customers to receive this additional relief for consumption from 1 November 2022. Please note, this additional QFDC relief may be taken away if you do not keep up with your payments.

Will non-commodity costs also be discounted?

In simple terms, your energy invoice is made up of two elements – commodity and non-commodity costs. Commodity costs relate to the wholesale element (electricity or gas) of your bill. As of 1 October 2022, commodity costs were roughly 86% of your electricity cost and 95% of your gas cost.

Non-commodity costs relate to the other charges incurred such as distribution and transmission of energy, the cost of running, operating and maintaining our energy network and government taxes and levies. As of 1 October 2022, non-commodity costs were roughly 14% of your electricity cost and 5% of your gas cost.

The Energy Bill Relief Scheme discount focuses on the commodity element of your energy invoice. Whilst green levies will continue to be listed and charged as usual, the government have created the discount taking into consideration a lower charge for these costs. The government supported price and discount takes these into account.

Standing charges will not be impacted or reduced by the Energy Bill Relief Scheme.

What will the discount be called on my invoice?

We expect the discount to show on your energy invoice (or backing data for flexible supply customers). We will highlight the discount as the ‘Energy Bill Relief Scheme (EBRS)’.

Is there a difference between half-hourly and non half-hourly discounted rates?

No, rates for half-hourly and non-half hourly electricity rates are the same.

Do we pay VAT on the discounted rate or the non-discounted rate?

VAT is only due on the amount you are charged by us as your supplier. So, the amount you are charged after the relief, is the amount on which VAT is due.

We're struggling to keep up with payments, what support is out there?

If you’re having difficulty paying your invoice or if you have a question which prevents you from paying the bill, then please let us know immediately.

Call 0330 094 9184 or email SEUKL-Collections@shell.com.

We’re available from 8am to 5pm, Monday to Friday.

You can also visit the help to pay area of our website for details of independent organisations that offer free advice. The government’s website also details a range of ongoing schemes in place to support businesses with their energy costs.

Do I need to apply for the scheme?

No, you do not need to apply for the Energy Bill Relief Scheme. As your supplier we will work alongside the government to ensure those eligible receive the discount. If you receive an email or text asking to click on a link to apply or fill in any bank details or personal information, then we recommend you ignore it and delete the message. It is likely to be a scam.

I’ve recently joined Shell Energy, will the EBRS discount be applied?

Yes, if you are eligible, we will arrange for the discount to be applied to your invoices for the duration of the scheme.

Will the date I receive my invoices change for the duration of scheme?

Both eligible and non-eligible customers on fixed contracts will continue to receive their invoices within the first 10 days of the month.

Will the scheme be extended beyond March 2023?

The Government has announced the Energy Bills Discount Scheme that will replace the EBRS from 1 April 2023.