Elexon to administer payments to Suppliers for the Government’s energy price guarantee

Following the approval of Balancing and Settlement Code Modification (BSC) P446 ‘Energy Price Guarantee Scheme for domestic customers’ by Ofgem, Elexon is pleased to have been appointed as Scheme Administrator.

What is the scheme for?

Under the scheme, 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 the next 2 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 later this month. 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

In a similar way to the electricity Settlement process, 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 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 in Settlement 

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

The Modification allows an extension to Elexon’s vires so that we can undertake administration of the payment scheme, which is a new, non-Settlement related function. Scheme payments will be accounted for separately from other BSC Costs and Trading Charges.

BSC Parties are not responsible for funding payments under the scheme. P446 allows for Elexon’s administrative and operational costs in undertaking the role of scheme administrator to be included as BSC Costs.

Ofgem approved the Modification on 22 September for implementation the following day.

FAQs about the scheme administration


Click on the X next to any of the icons to replace them with a short-cut link to the page you are currently on or search for a specific page.