Two government energy discount schemes, the Energy Price Guarantee (EPG) and the Energy Bills Discount Scheme (EBDS) ended on 31 March 2024.
Below we cover a little about what these schemes were, if the government has any plans to replace them, and what other support is available if you’re struggling with your bills.
What was the Energy Price Guarantee?
The EPG was a government energy support scheme introduced in October 2022 to help reduce the impact of rising energy prices on households. It limited the price that energy suppliers like us could charge for each unit of energy. It didn’t cap bills, which were still based on how much energy you used.
From October 2022 - June 2023, the government supplemented what customers paid for energy. This meant that instead of the typical household dual-fuel bill potentially rising inline with Ofgem's price cap (£3,549 - 1 October to 31 December 2022, £4,279 - 1 January to 31 March 2023 and £3,280 - 1 April to 30 June) a typical household saw an average annual bill of £2,500 until 30 June 2023.
However, Ofgem’s July 2023 price cap (£2,074 announced 25 May 2023) dropped below the government’s EPG (£2,500). So from 1 July 2023, the government’s financial support for residential energy customers effectively ended. Since 1 July 2023 all unit prices and standing charges, and therefore customer bills, have been determined by Ofgem’s price cap.
Support for prepayment meter (PPM) customers under the EPG differed slightly in comparison to other customers1. On 15 March 2023 the Chancellor announced in the Spring Budget that people using prepayment meters would receive additional support from 1 July 2023 to bring their bills in line with people who pay by Direct Debit. This meant that from 1 July 2023, a typical PPM customer would pay the same amount as an equivalent customer paying by Direct Debit until 31 March 2024.
From 1 July to 30 September 2023, the EPG prepayment meter discount applied to gas unit rates only, as the combined unit rate and standing charge for electricity prepayment meters were already less than the equivalent for Direct Debit.
From 1 October 2023 onwards there was a change in how the discount was delivered. Instead of discounted unit rates, PPM customers received a discount on standing charges. This made sure that PPM customers were covered by the EPG. This saving continued into the price cap period covering 1 January – 31 March 2024. With the end of the EPG, this support has now ended.
When did the Energy Price Guarantee end?
The EPG ended on 31 March 2024. The Ofgem price cap now determines customer’s energy prices. This has been the case since 1 July 2023. This will continue to be the case from 1 April 2024.
Price cap explained.
Understanding your energy prices can feel confusing. That’s why we’ve broken it down the energy price cap for you in this video. Plain and simple.
How does the Energy Price Guarantee ending affect my energy bills?
Below we break down what the end of the EPG means for different customers.
Prepayment meter customers.
If you use a prepayment meter then we’ll continue to apply Ofgem's price cap to the price you pay for each unit of energy. Unit prices vary regionally and by payment method and depend on the type of meter you have.
On 2 January 2024, Ofgem closed a consultation on extending support and proposed levelling PPM and Direct Debit standing charges from April 2024. Starting from 1 April 2024, Ofgem has introduced a levellisation allowance within the price cap. This means that Direct Debit customers will typically pay £10 more per year. Prepayment customers will typically pay £49 per year less (or £52 per year less including VAT)2. This policy replaces the support that was given through the EPG and ensures that PPM customers don’t pay a premium compared to Direct Debit customers.
Standard variable tariff (SVT) customers.
Customers on standard variable tariffs (SVT) will continue to receive prices set by Ofgem's price cap. Customers on SVT don’t need to take any action if the price cap changes. We’ll adjust your unit rates and standing charges automatically.
Fixed tariff customers.
In 2022 the government introduced floor unit prices which varied by region and payment type. These floor unit prices were equivalent to the minimum rate the price per unit would be discounted to. Floor unit prices were introduced because some people fixed at lower prices some time before the EPG, meaning their annual payments would already have been below the £2,500 average set by the EPG. Customers on fixed rate tariffs that were already below the floor unit prices continued to benefit from those low prices, but didn't receive a further discount for the duration of their fixed term.
The government’s floor unit prices remained unchanged between 1 October 2022 and 30 June 2023. From 1 July 2023, when the price cap fell below the EPG there have been no reductions on energy rates for fixed tariffs. Fixed tariffs are not covered by the price cap so your energy prices are determined by the rates applicable to your tariff. This situation remains unchanged from 1 April 2024.
What was the Energy Bills Discount Scheme?
The Energy Bills Discount Scheme (EBDS) was a government scheme introduced in April 2023 that gave non-domestic users a discount on wholesale energy prices. It ran from 1 April 2023 until 31 March 2024. It replaced the Energy Bills Relief Scheme (EBRS) which capped energy costs. Under the EBDS, heavy energy-using sectors, like glass, ceramics and steelmakers, were eligible for larger discounts than other users. Suppliers, like E.ON Next, automatically applied EBDS reductions to the bills of all eligible customers. Eligible businesses in heavy energy-using sectors, known as Energy and Trade Intensive Industries (ETIIs) needed to apply for higher levels of support.
The EBDS applied to non-domestic users who were:
On existing fixed price contracts that were agreed on or after 1 December 2021.
Signing new fixed price contracts.
On deemed3 / out of contract or standard variable tariffs.
On flexible purchase or similar contracts.
On variable ‘Day Ahead Index’ (DAI) tariffs (Northern Ireland scheme only).
Through the EBDS, the government provided a discount on gas and electricity unit prices. Eligible customers received a per-unit discount on their energy bills during the 12 month period from April 2023 to March 2024, subject to a maximum discount.
The relative discounts were applied if wholesale prices were above a certain price threshold. For most non-domestic energy users in Great Britain and Northern Ireland maximum discounts and price thresholds were set at:
Electricity - £19.61 per megawatt hour (MWh) with a price threshold of £302 per MWh.
Gas - £6.97 per MWh with a price threshold of £107 per MWh.
For ETIIs, maximum discounts and price thresholds were set at:
Electricity - £89 per MWh with a price threshold of £185 per MWh.
Gas - £40 per MWh with a price threshold of £99 per MWh.
When did the EBDS end?
The EBDS ended on 31 March 2024. There’s currently no scheme set to replace the EBDS. If the government announces new energy bills support for non-domestic users, we’ll let you know.
How does the EBDS ending affect my energy bills?
With the end of the EBDS, there’s now no government support available for non-domestic user energy bills. Ofgem’s price cap only applies to domestic energy users so your bill will be determined by the rates set within your tariff.
What other support is currently available?
The cost of living remains high, so we understand that the end of the EPG and EBDS may be a worry for you. If you’re struggling to pay, we have a number of resources available to help you.
How we can help:
• E.ON Next Energy Fund - Get grants to help pay your energy bills or to replace faulty home appliances. Check if you’re eligible for support from the E.ON Next Energy Fund.
• Free Debt Advice from StepChange - Complete a money health check with this simple tool from our partner StepChange who offer financial advice and can help you understand your next steps. Start your money health check now.
• Paylink - Create an online budget with our partner Paylink and we’ll help you set up an affordable payment plan to suit your individual circumstances. Create an online budget today.
• Priority Services Register - If you’re a vulnerable customer and think you’d benefit from extra help managing your energy account we can add you to the Priority Services Register (PSR). Find out how the PSR could help you.
• ReachOut - We’re funding confidential support to help you with any challenges you’re facing with your financial, mental, and physical wellbeing. Sometimes we may ask ReachOut to contact customers on our behalf, or you can contact us directly if you need help.
Impartial Advice:
• Citizens Advice - Get confidential, unbiased advice on a variety of subjects including your energy and personal finance. Citizens Advice is a network of independent charitable organisations that can help you tackle life’s ups and downs. Access free support from Citizens Advice.
• Mind - Managing money can impact your mental wellbeing. If you feel you need support then you can reach out to our charity partner Mind for respectful and reliable help with your mental health.
Contact our Energy Specialists if you’re having difficulty.
Our Energy Specialists are here to help you if you’re worried about your energy bills. If you’re struggling to pay, please visit our help page to find out more about how we can support you. You can contact our Energy Specialists for personal advice on WhatsApp.