Government to cut pharmacy energy bills from October, BEIS confirms
Community pharmacies in England, Scotland and Wales can expect to see their energy prices capped at “less than half the wholesale prices anticipated this winter”, the Department for Business, Energy and Industrial Strategy (BEIS) has confirmed to C+D.
Under the new government Energy Bill Relief Scheme, unveiled yesterday (September 21), business wholesale gas and electricity prices will be capped from October 1 until March 31.
The scheme will apply to businesses – including community pharmacies, BEIS clarified – which had agreed fixed deals on higher prices on or after April 1, when energy bills began to soar. Those on variable and flexible tariffs will also be eligible.
Who is eligible for the energy price discount?
For non-domestic customers on existing fixed-price contracts, the deduction will reflect the difference between the government-supported price and the relevant wholesale price for the day the contract was agreed. Customers entering new fixed price contracts after 1 October will receive support on the same basis.
Those on variable, deemed, and all other contracts, will receive a per-unit discount on energy costs, up to a maximum of the difference between the supported price and the average expected wholesale price over the period of the scheme.
The amount of this maximum discount is likely to be around £405/MWh for electricity and £115/MWh for gas, subject to wholesale market developments. Non-domestic customers on default or variable tariffs will therefore pay reduced bills, but these will still change over time and may still be subject to price increases.
For businesses on flexible purchase contracts, typically some of the largest energy-using businesses, the level of reduction offered will be calculated by suppliers according to the specifics of that company’s contract and will also be subject to the maximum discount.
Source: BEIS
Read more: Cost-of-living crisis: How are pharmacies supporting their staff?
The government has set a “supported wholesale price” of £211 per megawatt hour (MWh) for electricity and £75 per MWh for gas.
Businesses do not need to contact suppliers as the discount will be automatically applied in pence per kilowatt hour (p/kWh) to their bills, the government confirmed.
While the scheme will only apply to non-domestic customers in Great Britain, a “parallel scheme” will be established in Northern Ireland, “based on the same criteria and offering comparable support, but recognising the different market fundamentals”, the government said.
Review expected in three months
A review of the scheme will be published “in three months’ time to inform decisions on future support after March 2023”, the government revealed.
This review will focus “in particular” on identifying the “most vulnerable non-domestic customers and how the government will continue assisting them with energy costs”, it added.
Read more: 'We cannot subsidise NHS medicines bill': PSNC ramps up pressure on government
It will also assess “how effective the scheme has been in giving support to vulnerable non-domestic customers”, the government said.
“Continuing support to those deemed eligible would begin at the end of the initial six-month support scheme, without a gap,” it explained
Urgent legislation to enable the implementation of the scheme will be introduced at the earliest opportunity when parliament returns from recess in October.
“Cost crisis for pharmacies goes well beyond energy bills”
Following the announcement, National Pharmacy Association chair Andrew Lane acknowledged that while government relief “is very welcome”, it also “leaves room for doubt as it is only guaranteed for a few months”.
The support package “barely touches the sides of the overall cost crisis for pharmacies”, he added, “which goes well beyond energy bills and requires a more rounded and permanent fix, baked into NHS contractual arrangements”.
It comes after the Pharmaceutical Services Negotiating Committee (PSNC) pushed the government earlier this week for “immediate rescue packages” to help ease the impact of rising energy bills and capacity issues.
