Energy Support Package: Secondary Legislation

The Energy Prices Act 2022 received Royal Assent on 25 October 2022. The Act establishes the legislative framework necessary to deliver the Government’s energy support package and will ensure that households and businesses receive the urgent support they need to help pay their energy bills this winter.

To ensure these crucial schemes are placed on a secure legislative footing, the Government are tabling a number of statutory instruments (SIs) using the powers in the Energy Prices Act. These SIs contain the detailed regulations necessary to deliver our support schemes. They are essential in ensuring that the entire energy support package can be delivered this winter. To ensure energy consumers receive the urgent support they require, we are laying the majority of these regulations using the made affirmative procedure.

These regulations, subject to the made affirmative procedure, make provisions for the effective operation and implementation of the energy bill relief scheme. The GB energy bill relief scheme is established under sections 9 and 10 of, and schedule 1 to, the Act. The regulations provide powers to the Secretary of State to require suppliers to discount business bills, to require regular reporting by suppliers, to request information from suppliers and customers, and to require an audit of the supplier in relation to the scheme. In addition, the regulations will enable Ofgem to enforce the obligations placed on licensed suppliers under the schemes. Additional details of the schemes will be set out in accompanying rules. Guidance will also be issued.

These regulations, subject to the made affirmative procedure, make provisions for the effective operation and implementation of the energy bill relief scheme (Northern Ireland) which is established under sections 11 and 12 of, and schedule 2 to, the Act. The regulations provide powers to the Secretary of State to require suppliers to discount business bills, to require regular reporting by suppliers, to request information from suppliers and customers, and to require an audit of the supplier in relation to the scheme. In addition, the regulations will enable the Northern Ireland utility regulator UREGNI, to enforce the obligations placed on licensed suppliers under the schemes. Additional details of the schemes will be set out in accompanying rules. Guidance will also be issued.

These regulations, subject to the negative procedure, designate the domestic electricity price reduction scheme and the domestic gas price reduction scheme in Great Britain (the energy price guarantee) under the Energy Prices Act 2022. The effect of designation is that the provisions in section 2 and section 3 of the Act apply, including obliging suppliers to apply to join the scheme and, when joined, to remain in and comply with it. Ofgem is empowered to enforce compliance with the obligations set out in sections 2 and 3 using its existing enforcement powers. The regulations also designate district councils for an area in England for which there is a county council as a designated body for the purposes of section 15 of the Act. The effect of designation is district councils can now take action to support steps taken by the Secretary of State to meet energy costs under section 13 of the Act.

These regulations, subject to the made affirmative procedure, provide the definitions of “NI domestic electricity supply” and “NI domestic gas supply” for the purposes of reducing the charges for such supply under the domestic electricity/gas price reduction schemes for Northern Ireland (the energy price guarantee NI), made under section 5 of the Energy Prices Act 2022.

These regulations, subject to the made affirmative procedure, will require defined intermediaries provided with the benefit of support from the energy bill relief scheme to pass on that benefit to end users. An example of an intermediary and an end user is a landlord and tenant. The regulations also require intermediaries to provide information to end users on the benefit provided to the intermediary and whether, and how much, they are required to pass on to the end user, including where relevant a justification of why the pass-through amount is just and reasonable. The regulations provide for the ways in which an intermediary can effect a pass-through, as well as the details of enforcement through civil proceedings should an intermediary fail to effect a pass-through.

These regulations, subject to the made affirmative procedure, will require defined intermediaries provided with the benefit of support from the energy price guarantee, and/or the energy bills support scheme to pass on that benefit to end users. An example of an intermediary and an end user is a landlord and tenant. The regulations also require intermediaries to provide information to end users on the benefit provided to the intermediary and whether and how much they are required to pass on to the end user, including where relevant a justification of why the pass-through amount is just and reasonable. The regulations provide for the ways in which an intermediary can effect a pass-through, as well as the details of enforcement through civil proceedings should an intermediary fail to effect a pass-through.

These regulations, subject to the made affirmative procedure, will require heat suppliers to pass through the cost reductions they receive via the energy bill relief scheme to their heat network customers and to explain to consumers their plans to reduce bills. The energy ombudsman will provide consumers with independent redress if heat suppliers do not comply with these requirements. The regulations also require heat suppliers to notify the Government (or an authorised person carrying out regulatory functions) of the address details of all the buildings supplied by a heat network. This will ensure that the energy ombudsman has access to a complete database of heat suppliers when investigating consumer complaints.

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