The Energy Bills Discount Scheme Regulations 2023

Made: 24th April 2023

Laid before Parliament: 25th April 2023

Coming into force: 26th April 2023

The Secretary of State makes these Regulations in exercise of the powers conferred by sections 9(1) to (4), 26(2) and 27(2) of, and Schedule 1 to, the Energy Prices Act 2022[^f00001].

PART 1 — Introductory

CHAPTER 1 — Preliminary

Citation, commencement and extent

1

• (1) These Regulations may be cited as the Energy Bills Discount Scheme Regulations 2023 and come into force on 26th April 2023.

• (2) These Regulations extend to England and Wales and Scotland.

Interpretation

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• (1) In these Regulations—

• “the Act” means the Energy Prices Act 2022;

• “base discount” means an amount in respect of a supply contract and a period calculated in accordance with regulation 28;

• “base rate” means— the rate announced from time to time by the Monetary Policy Committee of the Bank of England as the official dealing rate, being the rate at which the Bank is willing to enter into transactions for providing short term liquidity in the money markets, or where an order under section 19 of the Bank of England Act 1998[^f00002] (reserve powers) is in force, any equivalent rate determined by the Treasury under that section;

• “base recovery amount” has the meaning given in regulation 32(2);

• “benefit calculation period” means— a billing period, or, where a billing period begins in one scheme period and ends in another, so much of that billing period as falls with a single scheme period;

• “billing period” means, in relation to a supply contract, a period of energy supply in respect of which, under the terms of the supply contract, the supplier is obliged or entitled to send to the customer an invoice or other statement of account;

• “business day” means any day other than a Saturday, a Sunday, or a day which is a bank holiday under the Banking and Financial Dealings Act 1971[^f00003] in any part of the United Kingdom;

• “category” has the meaning given in regulation 11(1)(a);

• “certified ETII operator” means a person in respect of whom an ETII certificate has been issued and not revoked;

• “Chapter 3 default” has the meaning given in regulation 26(1);

• “claim window” means a period in which a supplier may submit a discount recovery claim, set in accordance with regulation 44;

• “contract parties” means, in relation to a supply contract, the supplier and customer which are parties to the supply contract;

• “contracted wholesale price” means, in relation to a supply contract, that part of the supply price which represents the cost to the supplier at the wholesale price of energy supplied under the contract (whether or not it is separately identified in the contract);

• “the court” means— the High Court, or in Scotland, the Court of Session;

• “customer” means a person supplied or to be supplied by a supplier with electricity by way of GB non-domestic electricity supply[^f00004] or gas by way of GB non-domestic gas supply[^f00005];

• “deemed contract” has the meaning given in the relevant standard conditions[^f00006];

• “default benefit amount” has the meaning given in regulation 26(2);

• “defaulting person” has the meaning given in regulation 26(1);

• “discount” has, in respect of a supply contract, the meaning given in regulation 29;

• “discount recovery” means the recovery in accordance with Part 3 by a supplier from the Secretary of State of the amounts by which its charges under supply contracts have been reduced by the application of discounts under the electricity scheme or the gas scheme;

• “discount recovery claim” has the meaning given in regulation 32(3);

• “discount recovery rules” means the rules made by the Secretary of State under regulation 43;

• “discounted supply price” means, in relation to a supply contract, the supply price reduced by the discount;

• “EBRS” means the Energy Bill Relief Scheme for Non-Domestic Customers in Great Britain;

• “EBRS Regulations” means the Energy Bill Relief Scheme Regulations 2022[^f00007];

• “electricity scheme” has the meaning given in regulation 3(1)(a);

• “electricity system” means a transmission system or distribution system (as defined in section 4(4) of the Electricity Act 1989[^f00008]);

• “energy” means electricity supplied by way of GB non-domestic electricity supply or gas supplied by way of GB non-domestic gas supply;

• “energy reconciliation” means— the determination, by the reading of a meter, of the quantity of energy supplied under a supply contract in the period since a prior reading of the meter, and a reconciliation by comparison with the quantity previously estimated as supplied in that period, or the resolution, in respect of any period, of any question or dispute about a meter or a reading of a meter, or otherwise about the quantity of energy supplied under a supply contract, and a reconciliation by comparison with the quantity previously determined as supplied in that period;

• “ETII applicant” means a person in respect of whom an ETII application is made;

• “ETII application” means an application for an ETII certificate;

• “ETII certificate” means a certificate issued under regulation 16(1);

• “ETII proportion” means, in respect of a customer or provider and any period, the proportion determined as such in accordance with regulation 22;

• “ETII supply contract” has the meaning given in regulation 23(1)(a);

• “excluded fixed price contract” means a fixed price contract for which the price-fix date is before 1st December 2021;

• “first scheme period” means the period specified in regulation 6(1);

• “fixed price contract” means a supply contract under which, at the time the contract is entered into, the contracted wholesale price is fixed for the term of the contract, including where it is fixed so that different prices apply, for example, at different times of day, or in different seasons in the term of the contract;

• “flexible price contract” means a supply contract— under which the customer may elect from time to time to— fix the contracted wholesale price for particular quantities of energy to be supplied during certain periods, and cancel any such fixing of the contracted wholesale price, or which provides another mechanism by which the contracted wholesale price will be determined for periods specified in or determined under the contract;

• “gas scheme” has the meaning given in regulation 3(1)(b);

• “general supply contract” means a supply contract that is not an ETII supply contract or a QHS supply contract;

• “government supported price” has the meaning given in regulation 7(2)(a);

• “grid-delivered” has the meaning given in regulation 52(1)(b);

• “GSP decrement” has the meaning given in regulation 7(2)(b);

• “heat network” means a network that, by distributing a liquid or a gas, enables the transfer of thermal energy for the purpose of supplying heating or hot water to a building or persons in that building (and a network is not excluded from being a heat network only by reason of its being designed to rely wholly or in part on heat pumps particular to the buildings or premises served by the network);

• “ineligible quantity” has the meaning given in regulation 54(1);

• “maximum discount” has the meaning given in regulation 7(2)(c);

• “MD increment” has the meaning given in regulation 7(2)(d);

• “meter” means a meter (and associated equipment) installed at or near to the customer’s premises by means of which the quantity of energy supplied to the customer in a period may be determined;

• “minimum supply price” has the meaning given in regulation 7(2)(e);

• “opt-out notice” has the meaning given in regulation 4(3);

• “p/kWh” means pence per kilowatt hour;

• “pass-through regulations” means regulations made under section 19 of the Act in connection with energy price support (within the meaning of section 19(4) of the Act) under the scheme;

• “period of supply” means, in respect of a supply contract, a period of a whole number of consecutive days, in which the supplier has supplied energy to the customer, in respect of which the supplier claims discount recovery;

• “price-fix date” means the date when the contracted wholesale price applicable to a fixed price contract was fixed;

• “provider” means a supplier or any other person who supplies or otherwise makes available energy, heating, hot water or electricity to another person;

• “QHS applicant” means a person in respect of whom an QHS application is made;

• “QHS application” means an application for a QHS certificate in respect of a heat network;

• “QHS certificate” means a certificate issued under regulation 17(1);

• “QHS proportion” means, in respect of a customer or provider and any period, the proportion determined as such in accordance with regulation 22;

• “QHS supply contract” has the meaning given in regulation 23(1)(b);

• “reconciliation run-off date” has the meaning given in regulation 39(5);

• “recovery claim amount” has the meaning given in regulation 34(1);

• “reference wholesale price” means, in relation to a supply contract and a period of supply, the wholesale price which is deemed for the purposes of the scheme to be the contracted wholesale price, as determined under regulation 9 or in accordance with regulation 10;

• “scheme” has the meaning given in regulation 3;

• “scheme end date” has the meaning given in regulation 39(6)(b);

• “scheme introduction date” means the date on which these Regulations come into force;

• “scheme period” means the first scheme period or the second scheme period;

• “scheme start date” means 1st April 2023;

• “second scheme period” means the period specified in regulation 6(2);

• “supplier” means a licensed electricity supplier[^f00009] or a licensed gas supplier[^f00010];

• “supply contract” means a contract between a supplier and a customer which provides for GB non-domestic electricity supply or GB non-domestic gas supply at any time during a scheme period, and includes— a deemed contract, and a supply contract that continues to apply to a customer, and under which the supplier continues to supply energy to that customer, after it has been terminated or has expired through the passage of time;

• “supply contract recovery amount” has the meaning given in regulation 33(1);

• “supply price” has the meaning given in regulation 8;

• “supply quantity” means the quantity of energy supplied to a customer under a supply contract in any period of supply, excluding any ineligible quantity;

• “valid” in relation to a discount recovery claim, has the meaning given in regulation 40(4), and “invalidity” is to be construed accordingly;

• “variable price contract” means a supply contract under which the supplier may change the contracted wholesale price at any time by giving notice (as provided in the contract) to the customer;

• “wholesale price” means a price at which electricity or gas is traded in the wholesale electricity or gas market.

• (2) In these Regulations—

• (a) references, in the context of a supply contract, to the supplier or the customer are to the supplier or customer which is party to the supply contract;

• (b) references to quantities of energy are to quantities of electricity or gas expressed in kilowatt hours;

• (c) references to energy supplied under a supply contract are to energy supplied during a scheme period;

• (d) references to energy (or a quantity of energy) supplied under a supply contract are to energy supplied to the customer at its premises and measured as supplied by a meter or (where no meter is installed) estimated pursuant to a document designated for the purposes of section 173 of the Energy Act 2004[^f00011] (appeals to the Competition and Markets Authority);

• (e) references to the supply quantity under a supply contract in any period, at any time at which that quantity has not been determined by meter reading, are to the quantity of energy estimated by the supplier, in accordance with the supply contract, as supplied in that period;

• (f) references to—

• (i) the price of energy (or the price payable by the customer for energy) supplied under a supply contract are to the price expressed in p/kWh;

• (ii) charges payable by the customer under a supply contract are to the charges expressed in pounds.

• (3) In these Regulations—

• (a) a “gas day” is the period starting at 5 a.m. on one day and ending at 5 a.m. on the next day;

• (b) for the purposes of the gas scheme—

• (i) a reference to a day is to a gas day;

• (ii) a month begins at the start of the gas day which begins on the first day of the month and ends at the end of the gas day which starts on the last day of the month.

CHAPTER 2 — Energy Bills Discount Scheme

Application

3

• (1) Unless these Regulations provide otherwise, they apply separately for the purposes of the following schemes which they establish—

• (a) a scheme for reducing the amounts that would otherwise be charged for electricity supply by licensed electricity suppliers (the “electricity scheme”), and

• (b) a scheme for reducing the amounts that would otherwise be charged for gas supply by licensed gas suppliers (the “gas scheme”).

• (2) The electricity scheme and the gas scheme are referred to collectively as the Energy Bills Discount Scheme for Non-Domestic Customers in Great Britain) (the “scheme”).

Energy in scope of the scheme

4

• (1) These Regulations apply to all energy supplied under a supply contract in a scheme period, other than—

• (a) any ineligible quantity;

• (b) any quantity supplied under an excluded fixed price contract;

• (c) any quantity supplied under a supply contract for which an opt-out notice has been given under paragraph (3), and has not been withdrawn.

• (2) Where a person has been a supplier during a scheme period but has ceased to hold an electricity supply licence or gas supply licence, the Regulations continue to apply to that person (as if it were a supplier) for the purposes of reconciliation, as provided in regulation 39.

• (3) A customer may, by giving notice to a supplier, elect that no discount is to apply in respect of energy supplied under a supply contract between them on and from the date specified in such notice (which may be before, on, or after the date when the notice is given) (an “opt-out notice”).

• (4) Where a customer has given an opt-out notice, it may give a further notice to the supplier, withdrawing the opt-out notice in respect of energy supplied under the supply contract on and from the date specified in the further notice (which may not be before the date when the notice is given).

Making of rules

5

• (1) Rules made under these Regulations—

• (a) must be—

• (i) made by the Secretary of State;

• (ii) published as soon as is reasonably practicable after they are made;

• (b) come into force when they are published or on such later date as they specify.

• (2) Rules made under these Regulations may confer a discretion on the Secretary of State.

CHAPTER 3 — Basic terms of the scheme

Scheme periods

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• (1) The first scheme period is the period which begins with 1st April 2023 and ends with 30th September 2023.

• (2) The second scheme period is the period which begins with 1st October 2023 and ends with 31st March 2024.

Government supported price and maximum discount

7

• (1) The Secretary of State must, no later than the scheme introduction date, determine and publish, in respect of each scheme period, the scheme parameters for the electricity scheme and for the gas scheme.

• (2) The “scheme parameters” are—

• (a) a price (the “government supported price”, in p/kWh)—

• (i) for general supply contracts and ETII supply contracts;

• (ii) for QHS supply contracts;

• (b) the amount (the “GSP decrement”, in p/kWh) of a decrease in the government supported price, to be applied in relation to ETII supply contracts;

• (c) an amount (the “maximum discount”, in p/kWh) which is the maximum amount of any discount—

• (i) for general supply contracts and ETII supply contracts;

• (ii) for QHS supply contracts;

• (d) the amount (the “MD increment”, in p/kWh) of an increase in the maximum discount, to be applied in relation to ETII supply contracts;

• (e) the amount (the “minimum supply price”, in p/kWh) which is the minimum discounted supply price—

• (i) for general supply contracts and ETII supply contracts;

• (ii) for QHS supply contracts.

• (3) The Secretary of State may, in respect of either scheme period, for the purposes of the electricity scheme or the gas scheme, revise any scheme parameter by publishing a notice that specifies—

• (a) the revised scheme parameter;

• (b) the date, which must not be earlier than the date of publication, with effect from which the revision is made (“revision date”);

• (c) whether the revision applies in respect of—

• (i) variable price contracts, flexible price contracts or fixed price contracts, and