The Energy Prices Act 2022 received Royal Assent on 25 October 2022, the date given on the face of the Act1. It is chapter 44 of the 2022 public general acts and is described as "An Act to make provision for controlling energy prices; to encourage the efficient use and supply of energy; and for other purposes connected to the energy crisis"1.
The Act gives the Secretary of State power to establish domestic electricity and domestic gas price reduction schemes for Great Britain, and equivalent schemes for Northern Ireland1. A scheme of this kind provides for "reducing the amount that would otherwise be charged for GB domestic electricity supply by licensed electricity suppliers who are parties to the scheme, and (b) making payments to those suppliers in respect of those reductions in charges"1. The same structure applies to gas in Great Britain and to both fuels in Northern Ireland1. The Secretary of State may also modify or revoke a scheme1.
Suppliers are not left to opt in freely. A licensed electricity supplier providing GB domestic supply "must take all reasonable steps to become a party to the designated scheme as soon as is reasonably practicable", and must remain a party and comply with its terms1. Licensed gas suppliers face the same duty, and a gas shipper must apply to join if another party requests it in writing and the scheme would not work effectively without it1. In Northern Ireland, the Northern Ireland Regulator may give an NI domestic electricity supplier directions about how it performs the scheme's terms1.
Two details in the Act bear directly on what a household is charged. A reference to a charge for domestic supply "includes a reference to a charge that does not relate to electricity or gas supplied (such as a standing charge)"1. And reductions may be calculated by reference to the difference between the wholesale price paid for electricity or gas and "a notional wholesale price, if it is lower than the wholesale price paid"1.
The Act also covers non-domestic supply, with powers to reduce amounts charged to non-domestic electricity and gas customers and to make payments to suppliers for those reductions1. Separately, it allows support for meeting costs related to energy use, for enabling or encouraging efficient energy use, for costs related to energy supply, and for enabling or encouraging the supply of energy1.
On commencement, the Act states that "The other provisions of this Act come into force on the day on which it is passed", while one element is "in force at 25.12.2022, see s. 30(5)"1. The legislation record also notes a later modification: Schedule 6 paragraph 7(1) is modified by SI 2026/979 regulation 2, listed among changes and effects yet to be applied1.
Why it matters for households
The Act is the legal machinery behind the bill reductions households were told to expect, rather than a scheme that sets a rate itself. It lets ministers create a scheme, oblige suppliers to join it, and pay suppliers for the reductions they pass on. Because the definition of a charge expressly includes standing charges, the powers reach the fixed daily amount a household pays regardless of how much energy it uses, not just the unit rate1. The reference to a notional wholesale price sets out how a reduction can be worked out when the price actually paid for gas or electricity is higher1.
For a household's energy independence, the practical point is that the discount depends on a scheme being established and designated, and on suppliers joining and complying. The Act creates duties on suppliers and enforcement routes through GEMA, while preserving other remedies including contract law1. Northern Ireland is treated in its own sections, with a role for the Northern Ireland Regulator in directing suppliers1. The Act does not itself fix a unit rate, a standing charge or an end date for any scheme; those are not set out in the text assented on 25 October 20221.
What happens next
The legislation record shows a modification to Schedule 6 paragraph 7(1) by SI 2026/979 regulation 2 among changes and effects yet to be applied1. No further dated steps are given in the Act text.
Sources1 cited
- Energy Prices Act 2022, legislation.gov.uk