British Prime Minister Liz Truss speaks outside No. 10 Downing St. in London, Britain, on Tuesday. On Thursday, she unveiled a plan to cap energy costs as a result of higher prices caused partly by Russia's war in Ukraine. Photo by Hugo Philpott/UPI | License Photo
Sept. 8 (UPI) -- In her first major move as Britain's new prime minister, Liz Truss announced a plan Thursday that aims to help Britons pay more expensive utility bills due to a worsening energy crisis in the country.
Under the "energy price guarantee" plan, domestic energy costs will be capped for millions of homes and businesses across Britain.
The total cost of the plan is projected to be around $115 billion, but it would provide relief to many citizens who are struggling under the weight of rising energy prices -- which is due partly to Russia's ongoing war in Ukraine and its disruption to world energy markets.
The plan would cap the annual cost of home energy bills for Britons at less than $3,000, or about $250 per month.
"This is a moment to be bold," Truss told the House of Commons Thursday, according to The New York Times. "We are facing a global energy crisis, and there are no cost-free options."
On her second full day in office Thursday, Truss faced pressure to act quickly as the existing cap on utilities was expected to increase in October and raise average energy bills to more than $4,000 per year. Hundreds of thousands of Britons were planning to protest the hike by skipping their bill payments in October.
Under Truss' plan the average British home would save about $1,000 per year.
"We are supporting this country through this winter and next and tackling the root causes of high prices so we are never in the same position again," she added, according to the Times.
Britain's new leader has yet to reveal the details of how the government will pay for the package. An assessment by Deutsche Bank projected it could cost about $230 billion, which accounts for Truss' cap. However, the bank said that figure was "substantially lower" than it expected.
The overall cost is about half of what the government spent in emergency aid during the COVID-19 pandemic.
Truss addressed the energy crisis in her first address to the public following her election Monday by the Conservative Party, and she faces an economy that's still trying to dig out from the impacts of Brexit and COVID-19. The crisis has been exacerbated by the war in Ukraine.
In August, the Bank of England cited several factors squeezing the British economy, including a "near-doubling in wholesale gas prices since May" and "Russia's restriction of gas supplies to Europe." Last week, Russia shut down its main gas pipeline to Europe indefinitely, which threatened to leave millions of homes in the cold this winter.
In her speech on Tuesday, Truss said one of her first priorities would be to "deal with the energy crisis caused by Putin's war."
"I will take action this week to deal with energy bills and to secure our future energy supply," she said according to BBC News.