Get ready for EII Support Levy
EII Support Levy is expected to be transferred to non-domestic consumers as an extra charge on their electricity bills. What is this about?
A new charge will begin to appear on your electricity bill, called the EII Support Levy.
What is this about?
In late 2023, the government introduced the Network Charging Compensation (NCC) scheme, offering support to Energy Intensive Industries (EIIs) by providing 60% compensation on eligible network charges.
This reimbursement will be funded by a levy on all licensed GB electricity suppliers, known as the EII Support Levy. In turn, the levy is expected to be transferred to non-domestic consumers as an extra charge on their electricity bills.
Elexon has recently published the estimated cost of the levy for the first five months. Moving forward, this will be updated monthly. However, suppliers are still determining how to pass these charges on to customers.
What is the latest?
Suppliers have change of law or equivalent clauses in their supply agreements, allowing them to pass on charges imposed upon them in this manner.
The challenge is that while the total estimated value is known for the period April 2024 to August 2024, the allocation per supplier has not been finalised.
The values from September onwards will only be known monthly from now on and most importantly, suppliers have not determined exactly how they will recover these fees. Different methodologies have been proposed.
What could we expect?
- Smaller fixed price contracts: While suppliers may have the right to pass on these charges, complexities of the billing process may mean suppliers will choose not to pass these charges on until the next fixed price is negotiated.
- Larger flex and pass-through contracts: Some suppliers may apply this charge as a reconciliation based on past consumption from April 2024. This means that in May 2025, you may get an additional line item on the bill relating to consumption from April 2024, and so on each month.
- Some suppliers are indicating they may recover these charges based on more recent consumption.
- Suppliers adopting different recovery methodologies means that if you switch suppliers, you may receive invoices from your previous supplier for months after leaving them due to them using a different methodology to your new supplier.
What should I look out for?
- Any communications directly from your supplier in the coming weeks and months.
- Changes in your billing structure related to this charge.
- Potential adjustments as suppliers refine their approach over time.
- Are all cost elements included in any renewal offers?
How can Inspired help?
We are in ongoing discussions with suppliers regarding their proposed recovery methodologies and will seek to update our managed clients once suppliers have finalised their plans.
If you have any questions about the EII Support Levy or need further guidance, please contact the Inspired team on 01772 689250 or email us at [email protected]
