The current state of heat network regulations
18th December 2023Written by: Carly Freeman, Head of Customer Service
In the ever-evolving landscape of energy regulations, heat networks have largely sailed uncharted waters.
Your concerns on this have not gone unheard.
As someone who continuously looks to improve our services by monitoring call centre interactions and countless Trustpilot reviews, I sympathise with your apprehensions.
Due to this, I wanted to take the time to inform you of protections that are already in place, but more importantly share the changes on the horizon with Ofgem regulation due to commence from spring 2025.
Below is a breakdown of the current state of play. We’ll aim to keep this updated as and when industry updates happen.
Contents
Heat Network (Metering & Billing) Regulations 2014
What to expect from upcoming regulations
What is Insite doing in the meantime
Heat Network (Metering & Billing) Regulations 2014
Heat networks are presently regulated by the Heat Network (Metering & Billing) Regulations 2014. You can read the full regulations on the Government website, but we won’t bore you with the details.
Simply put, energy providers who are in charge of a heat network must install energy meters at both the point of entry to the building, where they are on a district heat network, and the final consumers property (your home). This allows us, as the metering & billing provider, to accurately charge you for the energy you used.
What is covered:
- Residents must be billed using actual meter readings at least once a year, or quarterly where billed electronically. If actual meter reads cannot be obtained estimates will be used.
- Bills must contain current tariffs, information on consumption (stating if actual or estimate reads have been used), and contact information on how to improve energy efficiency.
What isn't covered:
These regulations don’t touch upon customer protection rules and sit outside of Ofgem’s remit, and unless your scheme is registered with the Heat Trust (see below for more details) you will not have access to the Energy Ombudsman’s support services.
Heat Trust Scheme Rules
Due to the limited nature of the Heat Network (Metering & Billing) Regulations 2014, an independent non-profit voluntary customer protection scheme, Heat Trust, was established in 2015. Their Scheme Rules sets out best practise guidelines on the services that heat supplier must provide to their residents, crafted using Ofgem’s regulations.
Unfortunately, the protections granted by Heat Trust are only applicable to heat suppliers who register individual heat network developments up to the scheme.
This does mean Insite Energy cannot apply for membership. However, we strive to align with these guidelines where possible while operating on behalf of and under the instructions of your heat supplier. We always look to advise our clients on how to comply with Heat Trust Scheme Rules. Across our operations, we consistently look at how best we can support and protect our residents, focussing on elements such as the prioritisation of vulnerable residents and delivering an effective complaints policy.
What is covered:
Rules on:
- Customer service standards, including handling faults, emergencies, and home attendances.
- How to support consumers in vulnerable circumstances, both those in need of additional support and in payment difficulty.
- Complaint handling and escalation to the Energy Ombudsman if unresolved within 8-weeks.
- Service level agreements (SLAs) in terms of refunds, compensation, and response times.
- How heat charges should be calculated, period of notice to give residents ahead of tariff changes, rules in billing and back-billing, and payment methods provided.
What isn't covered:
- The price of the tariffs that you are ultimately charged.
- Legal enforcement of these rules as it is only a voluntary scheme.
Ultimately, we must always operate on behalf and under the instruction of your heat supplier. Where possible, we help them to comply with Heat Trust Scheme Rules by aligning our services with those outlined in the guidelines.
Current DESNZ initiatives
The Department for Net Zero and Energy Security (DESNZ), formerly the Department for Business, Energy & Industrial Strategy (BEIS), was established by the Government to secure long-term energy supply and bring down energy bills in the UK.
As part of this, they set up a few schemes to help heat network businesses and residents through the Energy Crisis:
|
Government Initiative |
Appliable for |
Summary |
What does this mean to you |
|
Energy Bill Support Scheme (EBSS) |
01/10/2022 to 31/03/2023 |
Every household was given a one-off £400 discount on their energy bills. |
You should have received this through from your electricity provider. |
|
Energy Bill Discount Scheme (EBDS) |
01/04/2023 to 31/03/2024 |
Replaced the Energy Bill Relief Scheme (EBRS) that was in place for 4 months prior. A further energy price cap introduced to help businesses through the energy crisis. Heat suppliers are required to pass any savings onto their domestic energy consumers. |
Your heat supplier should have registered for this scheme to allow the discounts to be available to you. If registered, any savings will have been passed on to you through your tariff. |
If you think your heat supplier has failed to apply the EBDS discount to your heat tariffs, you can escalate this to the Energy Ombudsman. Any heat suppliers who have not complied may be persecuted under the Energy Prices Act 2022. Further information on how this applies to your energy bills and next steps for you, as a resident, to take are outlined in our blog post.
We’ll follow up in the new year with what is likely to happen from 1st April 2024 when EBDS ends.
Future Ofgem regulation
Last year, DESNZ announcement that Ofgem have been appointed as the regulator of heat networks. Consultations to help set the regulations are currently under way, and they are expected to be fully implemented in 2026.
What to expect from upcoming regulations
Back-billing: Limited to 12 months, except when the customer is at fault or under specific regulations.
Refund processing: Addressing refund concerns and ensuring fair and timely processes for residents.
Tariff change notification: Notification must be given 30-days before energy tariffs are changed. Where notifications aren’t sent, we act under instruction of your heat supplier.
What are the timescales of regulation coming in?
|
When |
What |
|
Summer 2023 (where we are now) |
Ofgem released the first of several written consultations to heat network industry stakeholders to gather feedback into how regulation should look. The next consultation is set for release before the end of the year. |
|
2024 |
Ofgem will release further consultations and supporting webinars on future regulation to ensure regulation is implemented effectively, appropriately, and fair for suppliers and residents. |
|
Spring 2025 |
The first stage of regulation will come in, focussing on customer protection. This will include the provision of services relating to transparency of information, vulnerable customer protection, and metering. Ofgem will also start collecting pricing data from registered heat suppliers to understand the state of the industry to establish appropriate regulation in this area. The Energy Ombudsman and Citizens Advice services will also be available to all heat network residents. |
|
2026 |
Full regulation should be in place including pricing rules and guaranteed service payments. |
What is Insite doing in the meantime?
Strides are being made to bring transparency, fairness, and accountability to the industry. With change on the horizon, we are actively taking a part in navigating these unchartered waters. How?
We have participated in Ofgem’s consultations to advocate for our residents’ interests. Prior to this, we have worked together with industry bodies, including DESNZ and the UK District Energy Association (UKDEA), to escalate issues heat network consumers are facing. We also follow Heat Trust Scheme Rules where possible.