The UK government introduced the Energy Prices Bill in Parliament on 12 October 2022, providing what it called the legislative footing for support with energy bills this winter1. The Bill underpins the Energy Price Guarantee for domestic consumers and the Energy Bill Relief Scheme for businesses and non-domestic properties, and includes measures to deliver comparable schemes in Northern Ireland1.
The Energy Price Guarantee is intended to ensure a typical UK household pays around £2,500 a year on its energy bill, depending on use, for two years from 1 October 20221. A separate policy paper states the scheme runs from 1 October 2022 until 31 March 2023, with a review to consider more targeted measures after that period, and that a typical household in Great Britain will save around £700 this winter compared with prices under the existing price cap, reducing bills by roughly a third2. The two documents differ on the guarantee's duration: the press release describes a two-year scheme, while the policy paper gives an end date of 31 March 20231.
The Bill also covers households outside the main schemes. The Alternative Fuel Payment is a one-off £100 payment to UK households not on the mains gas grid that use fuels such as heating oil1. The Northern Ireland Energy Bills Support Scheme provides £400 of support to households in Northern Ireland this winter, and the Energy Bills Support Scheme Alternative Fund provides £400 to households across the UK without a domestic electricity contract, delivered through local authorities1. In Northern Ireland, benefits from the Energy Price Guarantee are passed through from 1 November 2022, with the level of benefit set to cover increased costs between 1 October and 1 November 2022 as well2.
The Bill contains pass-through requirements. Legislation will require landlords and heat network operators to pass benefits through to tenants, and an Alternative Dispute Resolution body will handle complaints from consumers against a heat network that has not complied1. It also provides powers for a temporary Cost-Plus Revenue Limit on low-carbon generators not covered by a Contract for Difference, applying in England and Wales, with the Scottish Government being consulted on whether it extends to Scotland1. The government said the limit is planned to come into force from the start of 2023, with the precise mechanics subject to a consultation to be launched shortly1.
"The Energy Prices Bill, introduced in Parliament today (12 October 2022), provides the legislative footing needed to ensure that people and businesses across the UK receive support with their energy bills this winter"
Why it matters for households
The Bill converts announced support into enforceable arrangements, which matters where money reaches a household through someone else. Tenants whose landlord buys the energy, and residents on heat networks, depend on the pass-through provisions to see the benefit at all1. Households without a domestic electricity contract, including some park home residents, sit outside the main Energy Bills Support Scheme and are routed to the alternative fund instead1. Households off the gas grid receive a fixed £100 rather than a unit-price guarantee, so their exposure to heating oil prices is not capped in the way gas bills are1. The Cost-Plus Revenue Limit addresses the link between gas prices and the price paid for electricity generated from renewables and nuclear, which affects the wholesale cost component of every electricity bill1.
What happens next
The Bill will be subject to the standard parliamentary process for emergency legislation1. A consultation on the Cost-Plus Revenue Limit is to be launched shortly, with the measure planned to be in force from the start of 20231. The next allocation round of the Contracts for Difference scheme will launch in 2023 as planned, and powers are being taken to consider a voluntary Contracts for Difference process for existing generators in 20231. An announcement on the Energy Bills Support Scheme Alternative Fund is due in due course1.