Businesses may be subject to a one-off Renewables Obligation charge in December 2020 due to the closure of several suppliers.

Several UK suppliers ceased trading between April 2018 and March 2019 and, as a result, the companies in question failed to meet their Renewables Obligation (RO) contribution for this compliance period.

Active suppliers were then required to pay the outstanding RO costs to cover the shortfall, which was enforced by regulator, Ofgem; the total cost of this was £97.5m.

These additional costs may now be passed onto Flex and I&C Pass Through customers. For example, Haven Power have announced a one-off charge in December 2020.

Businesses should also be aware that some suppliers have changed rates on non-fixed contracts in an attempt to recover their increased RO contribution. It is advisable to check with your broker to find out how these costs may be recovered by your energy supplier.

What does this mean?

In December 2020, affected customers could incur a one-off charge on their energy bill. Even if customers have since changed contract, they may be charged by whoever supplied their energy between April 2018 and March 2019.

Customers who receive an E-Bill can find the charge on a new line on their invoice.

In other cases, flex customers may see a slight adjustment in their energy rates.

For more information about non-energy costs see our resources:
Guide to reducing third-party energy costs
What is in my energy bill?

If you would like to learn more about the Renewables Obligation charges, or non-energy costs in general then call one of our consultants on 0333 1234 313, or email us at info@powerdirectltd.com.

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