EXPLANATORY NOTE
(This note is not part of the Regulations)
These Regulations, which apply in Northern Ireland, establish the Energy Bill Relief Scheme for Non-Domestic Customers in Northern Ireland (“EBRS”). EBRS is a scheme for reducing the costs, to non-domestic customers, of being supplied with electricity or gas (“energy”) by a supplier that holds a supply licence under the Electricity (Northern Ireland) Order 199220 or Gas (Northern Ireland) Order 199621.

The Regulations require suppliers to reduce, by amounts prescribed by the Secretary of State, the prices that they charge customers for energy during the “scheme period” (1st October 2022 to 31st March 2023). Suppliers are entitled to recover from the Secretary of State reductions made under Parts 2 and 4, but not under Part 5 of the Regulations.

Part 1 (introductory) defines key terms and parameters of EBRS. With certain exceptions, EBRS applies in respect of all contracts for the supply of electricity and gas by licensed suppliers to non-domestic customers during the scheme period. However, the detail of its application to any given contract (including how discounts are calculated) depends on how prices are set under it.

Part 2 (discounted supply price) sets out how the discounts that are to be applied by suppliers are to be calculated, based on wholesale energy prices. The Regulations set out how the figures to be used in calculating discounts are derived (regulations 10 and 11). A supplier must first assign each contract to the correct category (e.g. “fixed price contract”: see regulations 12 and 14 to 16) before calculating the applicable discount and providing it to the customer (regulations 17 to 20).

Part 3 (discount recovery) deals with the process by which each supplier is entitled to be paid by the Secretary of State an amount equal to the charges it has foregone in applying discounts under Part 2. In specified circumstances, the amount that a supplier receives in response to its claim for payment of an amount in respect of discounts is adjusted. Where such adjustments result in a negative sum, the customer must pay that sum (as a positive amount) to the Secretary of State. Amounts claimed by suppliers may be withheld in certain cases, for example where a supplier has acted dishonestly or failed to take proper measures to prevent fraud.

Part 4 (adjustment of discount or supply quantity in certain cases) makes provision to prevent, suppliers or customers from deriving greater benefit from EBRS than is intended or benefit that is not intended in certain scenarios. The Regulations provide for the benefits that customers and suppliers receive from the scheme to be reduced to take account of their entry into specified kinds of arrangements.

Part 5 provides for an additional reduction to be applied to the amounts payable for energy by a defined group of customers who are supplied under so-called “deemed” or “out-of-contract” contracts. Reductions applied under Part 5 are not recoverable from the Secretary of State.

Part 6 (further provisions) deals with a number of different matters. Regulation 60 prohibits unreasonable increases in suppliers’ charges and other changes adverse to the customer. Regulation 61 implies terms relating to the scheme into non-domestic supply contracts. Regulations 64 to 67 impose information and reporting obligations. Regulations 67 to 71 make provision about the resolution of disputes arising from the operation of the scheme.

A full impact assessment of the effect that this instrument will have on the costs of business and the voluntary sector is available from the Department for Business, Energy and Industrial Strategy at 1 Victoria Street, London, SW1H 0ET and is published with the Explanatory Memorandum alongside the instrument on www.legislation.gov.uk.