U.K. Cuts Energy Bills for Companies Through Winter

The British government announced details of a plan on Wednesday to cut energy costs for companies over the winter, after industry groups warned that soaring bills were threatening the survival of countless businesses, the New York Times reported. Beginning in October and lasting for six months, businesses, charities and other public-sector organizations, including schools and hospitals, will see the wholesale price per unit they pay for energy set at 211 pounds (about $240) per megawatt-hour of electricity and £75 for natural gas. The government said this was less than half the wholesale prices anticipated for winter. It will revert prices back to where they were in the spring, according to Cornwall Insight, an energy research and consulting company, which said the reduction to energy costs for businesses would be “substantial.” Energy prices have soared across Europe as Russia has restricted the flow of natural gas to the region and countries have scrambled to find alternative sources of energy. While wholesale gas prices, which have a large influence on electricity costs, have dropped from recent record highs, they are still much higher than in recent winters. Households and businesses in Britain, even with the caps, are still confronting higher-than-usual energy costs, which have contributed to rising prices for other goods and services, squeezing budgets. The business-focused plan accompanies a sweeping initiative to freeze household energy bills for the next two winters. These expansive policies have been announced without official estimates of how much they will cost. Economists predict that the household bill freeze could cost £150 billion. But since the plans depend on volatile wholesale market prices for energy and a wide range of business contracts, the eventual bill is uncertain. Economists are expecting a large increase in government borrowing to fund the policies. Read more.