Capacity Market (CM) charges had been suspended from being passed through to business energy bills, pending the final ruling in a case between Tempus Energy and the UK Government which had been brought in front of the European commission.
On 25 October 2019 the case was concluded and the below statement from the government’s official website was posted advising that:
“The European Commission has confirmed its original decision in 2014 to grant state aid approval for the Capacity Market, enabling it to be restored and payments that have been suspended since November 2018 to be made.”
The Secretary of State for Business, Energy and Industrial Strategy has written to National Grid Electricity System Operator (ESO) and the Electricity Settlements Company (ESC) to notify them of the Commission’s decision and confirm that the trigger for the resumption of capacity payments has occurred.
These bodies are required to restart all Capacity Market functions that had been suspended during the standstill period.”
What does this mean for Business Energy customers?
UK Energy suppliers now need to make full payments for their share of the Capacity Market back billed to November 2018. This means that business energy customers should expect to see the CM pass-through charges on their bills again, yet again increasing costs!
Primarily this will impact business customers who are on a ‘flex contract’ or in some cases even those on a fully fixed energy contract whose supplier’s t’s and c’s allow additional Government charges to be passed through to their bills in addition to their billable unit rate!
This will not affect all customers as some suppliers had pre-empted the reinstatement of the Capacity Market and rather naughtily continued to bill customers for the charges incurred to date and as such, these customers would have already paid their CM charges over the period of suspension.
To discuss how this could impact your business or If you are concerned about the back billing of CM charges and would like Fox energy to validate your bills to ensure you have not been over charged then please get in touch at [email protected] or call the team on 0800 488 0915.