UPDATE ON THE
NEW ENERGY
PLAN
This is a quick follow up to the email that we sent out last week about Government support for business energy costs, with a brief explanation as to how we think the government will deploy their support for business.
From our conversations with Ofgem and suppliers. We have managed to get a handle on how the support will be rolled out. However, nothing is definite until it is announced.
We are told that the support will be by way of a discount on the wholesale price of your energy, with a line on your bill that will detail your support.
We believe that the support will have a ceiling which will be set at @ 30ppkwh.
We believe that the government will target the support, so that you end up spending a maximum of 36- 38 ppkwh.
This support package only covers the six months from October 2022 and April 2023
I will give three examples to try and demonstrate how we think it will work for you.
In the background the cost of energy is still on the increase, so you must still put yourself into a contract sooner rather than later
- If your current contracted price is lower than the cap (38ppkwh), you will retain that advantage and stay on your current pricing.
No-one intends to increase your prices. - If your current contracted price is higher than the cap (38ppkwh)but below the max support amount (30ppkwh) for example if your current contracted rate is 54ppkwh, the government will provide support of 16ppkwh to bring your spend in line with the cap.
This will be shown as a line on your bill. - If you are on a very high rate, for instance A variable deemed or out of contract rate. Of more than the cap, so anything above 68ppkwh you will receive the maximum support of 30ppkwh. If for example you are on a rate of 96ppkw because you are currently out of contract
You will be charged 96ppkwh, the maximum support would be applied to your account, and you would be billed at 66ppkwh and the 30ppkwh support would be shown as a line on your bill.
Obviously we still need to wait on an announcement from the government, which we should have on Thursday. So there is no need to do anything right now, there are however, a couple of things that you need to remember. This support is only for the next six months to help see us through the winter, in the mean time the government are producing a report, that is aimed at a more targeted support after this period. What that looks like no one knows.
The most important point is that there is a need for support because there are no indicators, that in the short and medium term, energy prices are going to come down, in fact all indicators are that they will continue to rise. Hence the need for government intervention and support.
In addition to this most of the suppliers will increase their variable rate quite considerably on October 1st 2022 which will put many customers outside of the support.
Unfortunately, a return to the prices that we had access to last year is not going to happen any time soon. The Government’s target to make the UK energy Independent is 2040. Until then the investment in infrastructure will be huge and we as energy users will be picking up the bill.
ANY
QUESTIONS
Any questions please feel free to fill out the form below and one of our Gorilla’s will get back to you
Please accept this information as it is intended, We do not have a detailed description from the Government or any supplier as to how this process will work exactly. These are deductions based on documents on the .GOV website. Industry knowledge and the speech of the Prime Minister, so very much an opinion rather than fact.
Our business as an energy broker is on hold and we cannot sign a contract for a customer at this point. As soon as we have more information we will update you. Good Luck in all of your endeavours.