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- Lots of small businesses are facing an increase in energy costs due to the Government’s Energy Bill Relief Scheme (EBRS) ending
- The worst hit are businesses that took out fixed tariffs in mid to late 2022, when energy costs were at their highest
- To help with this, our affected fixed tariff customers will now be eligible for 1 of these 2 options to bring down their energy bills:
- Blend & Extend tariffs that bring customers’ prices down immediately by extending their contracts
- A 40% exit fee that makes it much easier for customers to end their contract early and move to cheaper rates
- You can find details on how we’re helping businesses like yours by:
- continuing to read this blog post for details of these solutions, including which one you qualify for
- looking at the other ways we’re supporting business customers through the energy crisis, such as payment plans and payment holidays
- getting in touch with our energy specialists to find the best option for you and talk through any payment concerns
The background to these increased costs
In 2022, energy costs hit unprecedented levels. The Government introduced EBRS to help businesses manage these extremely high prices. It provided support to lots of our business customers, but it ended on 31st March 2023.
On 1st April 2023, the government replaced EBRS with the Energy Bills Discount Scheme (EBDS). Like EBRS, EBDS offers discounts on businesses’ energy unit rates. But, compared to EBRS, fewer businesses qualify – and those who do receive much lower discounts.
😡 fixed tariff
A tariff where the price doesn’t change for the duration of the contract, even if wholesale prices do.
😡 variable tariff
A tariff where the supplier can change the price at any time, based on changes in the wholesale market.
This table shows the difference in support between EBRS and EBDS, split into
:fixed tariff and :variable tariff customers:
* When we refer to an average small business here and later in the blog post, we mean one using 8,000kwh electricity and 20,000kwh gas per year
This reduction of government support has made things harder for lots of businesses
Customers who joined on fixed tariffs in mid to late 2022 are the most affected. This is when energy costs were peaking, and many businesses fixed their prices at those levels.
Now EBRS has ended, businesses in that position are left with higher fixed prices for the rest of their contract.
We want to do everything we can to support those customers on fixed tariffs that are suffering as a result of this. So, we’ve introduced some solutions to bring down bills quickly.
Our contract options help customers hit by the end of EBRS
Typically, energy suppliers only change prices for businesses on fixed terms if they pay out their whole contract. But, we recognise that our customers need special help to get through this difficult time.
That’s why we’re offering these 2 solutions to reduce energy prices quickly. They offer ways for fixed contract customers to move to lower energy prices, long before their current contract ends.
Specifically, they’re for businesses that:
– are on fixed contracts
– have non-half-hourly meters
– have an electricity unit rate of 40+p per kWh, and/or a gas unit rate of 12+p per kWh
– meet one of the options’ specific criteria (see below)
Customers that were most affected by the end of EBRS are each eligible for 1 one of them.
Solution 1: Blend & Extend tariffs
Customers can significantly reduce their energy rates by moving to a longer contract
They don’t have to pay an exit fee to access this
This comes in 2 versions: a 24 month contract or a 36 month contract
Savings on the average small business’ monthly bill:
46% with the 24 month version
28% with the 36 month version
This option lets customers quickly reduce their energy costs.
Both tariffs bring monthly bills down to a much lower level. The 24 month version even takes the average bill below EBRS:
Customers that have made an advance payment for their current contract can carry it over to the new extended one. Those that didn’t will need to make one worth 3 months of the new contract.
Solution 2: a 40% exit fee
Customers can leave their contract by paying 40% of their remaining contract value
They can then enter a new 12 month fixed contract at today’s lower rates
Savings on the average small business’ monthly bill:
41%
Like the Blend & Extend tariffs, this provides a huge reduction on energy costs.
It brings the average monthly bill down nearly as low as it was under EBRS:
To access this support, get in touch – we’d love to help
Our knowledgeable energy specialists will take you through the solutions we offer and sign you up for the right one.
We’re always happy to have conversations with you about these and other payment concerns. It doesn’t matter whether you’re in credit or debt with us, we’re here to help you find an arrangement that works for you.
You can get in touch over by email or over the phone.
Check out our FAQs for more information:
Who qualifies for these options?
×
They’re for customers on fixed contracts with electricity unit rates that are 40p/kWh or higher, and/or gas unit rates that are 12p/kWh higher.
The criteria for each one differ slightly, depending on contract length and start date. See above for the details.
Which option is best for me?
×
The options are for different types of contract, so you won’t qualify for more than one. Check the information above to see which one is available for your contract type.
For help understanding whether you qualify for any of them, get in touch.
What support is available for customers that don’t qualify for these options?
×
We’re taking lots of steps to make energy more manageable during this crisis, such as:
- offering payment plans and payment holidays
- giving tailored expert advice
- keeping prices fair by lowering tariff prices
Check out our support blog to learn more about these and other ways we’re making business energy fairer.
How do Blend & Extend tariffs work?
×
They take the costs of an existing tariff and spread them over a longer term. This allows customers to access the cheaper prices of a new contract.
We’re not pricing in any additional profit – in fact we’re taking a cashflow hit. We’re just spreading the high wholesale cost over a longer term.
Now wholesale energy costs are lower, why don’t you just reduce customers’ prices in the middle of their fixed contract?
×
When a customer signs up for a fixed contract, we buy all the energy for that contract length at the prices available at the time.
So, reducing prices for customers mid-term would lead to us making a big loss.
As a company, we always make our rates as low and as fair to customers as we can. But the loss we’d incur by reducing prices mid-term would be too risky given what’s happened in the energy market in recent years. We have to price responsibly to make sure we will be around to support our customers for years to come.
Why have you started charging exit fees?
×
In normal times, we don’t charge exit fees. We believe that the level of service we offer should be good enough for our customers to want to stay – even if they can find slightly better prices elsewhere as the market moves around.
However, with the unprecedented high prices we saw last year, we needed to include exit fees for two and three year contracts. This guards against the risk of customers leaving mid-term.
The 40% exit fee option we’re offering doesn’t cover the loss we would make if all eligible customers took it up. But, it does allow us to cover some of the costs we would incur.
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