Elexon to administer payments to Suppliers for the Government’s Energy Price Guarantee

Elexon will manage payments to Suppliers under the UK Government's Energy Price Guarantee

Elexon will manage payments to Suppliers for the Government’s Energy Price Guarantee (EPG) for household electricity customers.

The EPG will reduce the unit cost of electricity and gas so that a typical household in Great Britain pays on average around £2,500 a year on their energy bill for two years, from 1 October 2022.

A multi-party contract has been signed by BEIS, Elexon and participating Suppliers. Payments will be made to Suppliers starting from mid-October 2022. To manage the electricity related payments for the EPG, we are using estimates of the volume of electricity that Suppliers’ customers have consumed, using data from our Supplier Volume Allocation Agent (SVAA) system.

Using metered data from Suppliers

Elexon manages the electricity Settlement process which is critical to the smooth running of the electricity system.  We will manage the EPG in a similar way to Settlement. When we receive actual metered data from Suppliers  we will carry out reconciliation of the subsidy payments over a 14-month period. During this period Elexon payments will be netted against movements in consumption based on actual meter reads.

We are using the data to apply a pence/kWh rate against each Supplier’s total household consumption, and working out the payments owed to each Supplier. We will pass this information to HM Treasury which will transfer the sums required for subsidy payments to Elexon. A similar scheme will be operated for household gas tariffs.

Using our in-depth expertise

Elexon Chief Executive, Simon McCalla, said: “Wholesale energy prices have hit record levels this year resulting in an unprecedented impact on the energy market and households.

“We are pleased to be working alongside Government to support the EPG. We will be using our expertise in electricity Settlement and our track record in managing industry data.

“As a not-for-profit organisation we are here to support the industry and households during this difficult time. A lot of work has been completed very quickly to establish the payments scheme and develop the Modification. I would like to thank everyone who has been involved, especially colleagues across Elexon.”

Extending Elexon’s vires

An extension was needed for Elexon’s vires so that we can undertake administration of the payment scheme, which is a new, non-Settlement related function. Ofgem approved this change (Modification P446) and it was implemented on 23 September.

Scheme payments will be accounted for separately from other BSC Costs and Trading Charges. BSC Parties will not be responsible for funding payments under the scheme as P446 allows for Elexon’s administrative and operational costs in undertaking the role of scheme administrator to be included as BSC Costs.

Contact Information

Communications Team
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