The transition to a low or zero carbon economy cannot be achieved unless it works for residents.

Heat networks are an essential part of decarbonising heating in the UK, being able to connect to any heat source including waste heat. Like any utility, there will be some customers who would benefit from additional support. There is a more particular need for care for customers in vulnerable circumstances living on heat networks because they are currently monopoly supply arrangements where customers cannot switch their supplier.

In the UK, heating and hot water are essential services for householders. Reliance on these services can be higher among certain residents, depending on their circumstances at any given time. For example, those with young children, those who spend a significant time indoors or have long-term illnesses are likely to have a higher level of dependence on household utilities. These customers may also have less flexible usage patterns of heating and hot water.

Other customers may find it challenging to communicate with providers due to their circumstances, such as mental health issues, those who are recently bereaved or experienced a significant life shock, language barriers or disabilities such as being partially sighted or hearing impaired.

Another potentially difficult interaction is for those who are struggling financially, whether because of on-going low income or recent events affecting financial stability, and many can feel uncomfortable or awkward discussing these issues with suppliers.

Any of these circumstances, along with many others, could affect us at any time, and can combine to mean that we are “less able to protect or represent our interests in the energy market”. This is Heat Trust and Ofgem’s definition of customers in vulnerable situations.

In fact, a Mando webinar recently pointed out that when you add up the various scenarios for vulnerable situations – e.g. considering that 1 in 4 UK residents will experience poor mental health every year, 21% of adults don’t have basic digital skills and 11 million people in the UK suffer from hearing loss – it becomes apparent that these are not minority considerations.

How the heat supplier interacts with all customers, but especially those in vulnerable situations, can have a significant impact on their satisfaction and willingness to engage further with their supplier.

Suppliers can be proactive in providing additional support for customers. Measures can include training frontline staff, both in responding to enquiries remotely and property visits, to be able to identify potential vulnerabilities and know what the supplier can offer that customer. It can also include processes such as flagging customer vulnerabilities on internal systems and robust strategies for keeping ‘priority services registers’ up-to-date.

Some heat suppliers are more prepared for this than others, which is where Heat Trust can help. Heat Trust sets minimum standards for the heat network sector on customers in vulnerable situations, among other customer protection standards, in our ‘Scheme Rules’.

Heat Trust has now been in operation for over 4 years, and we are reviewing the Scheme Rules in stages to ensure they remain fit for purpose. The first ‘package’ to be reviewed is customers in vulnerable situations, where we have looked at the approaches of other regulators e.g. Ofgem and Ofwat, and looked into NICE guidelines on how a warm home impacts health. This research also fed into additional guidance for the suppliers who are registered with Heat Trust.

This is timely as Ofgem, the regulator for gas and electricity markets, has recently updated its consumer vulnerability strategy. This area is also likely to be a key focus of the new regulator when UK regulation for all heat networks (currently out for consultation) is introduced.

If you work in this sector, or are interested in learning more, please read our consultation and answer any of the questions that are relevant to you in the form provided by Thursday 12th March.

Author: Joanna Read

Thursday 6th February 2020

Today, the Department of Business, Energy and Industrial Strategy (BEIS) published its consultation on a market framework for heat networks. The consultation confirmed that government intends to provide powers to Ofgem to be the statutory regulator for the sector.

Heat Trust welcomes the consultation and supports the decision to appoint a sector regulator.

The key proposals in the consultation centre on licensing and an authorisation regime:

  • The proposed legislative changes will give heat network developers equivalent statutory rights and undertakings to other utilities, such as gas and electricity. A licensing arrangement will be established for those parties that wish to secure these additional powers.
  • The proposed authorisation regime for consumer protection would give Ofgem oversight and enforcement powers across quality of service, provision of information and pricing arrangements for all domestic heat network consumers. This would be funded through fees scaled according to the regulated party’s size.

BEIS highlights the work of Heat Trust in the consultation, noting that by registering with Heat Trust now,
“organisations will not only be able to demonstrate the quality of their service to consumers right now, but they will also be better prepared for the transition to regulation.”

Bindi Patel, Director at Heat Trust said:

“This is a milestone moment. We welcome and support confirmation from government of its plans to introduce statutory regulation. Heat networks have an important role in decarbonising our heat supply. This consultation sets out an enabling framework to support industry, and importantly, ensures customers served by heat networks are robustly protected, and enjoy the benefits of low carbon heat.
 
“We are pleased that BEIS has stated that customer protection should apply to all residential and micro-business heat network customers. Work to deliver this ambition now begins, and we look forward to sharing our learnings and experience with government and Ofgem to help inform new regulation.”
 

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Notes

Heat Trust is all about protecting heat network customers.

We are an independent, non-profit consumer champion for heat network customers that holds the industry to account for the benefit of everyone involved. We make sure customers enjoy heating systems fit for the future by:

  • Applying strict customer service standards to heat suppliers, similar to those for traditional gas and electricity suppliers;
  • Providing access to an independent dispute resolution service through the Energy Ombudsman; and
  • Working with suppliers to promote best practice, innovation and continuous improvement in customer service.

Launched in November 2015, Heat Trust provides protection to over 10% of residential and micro-business heat network customers. Our annual reports can be found here.

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Contact details
Bindi Patel
Director
Heat Trust
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Read Newsletter - Winter 2019

We believe that all heat networks should be required to meet the standards set by Heat Trust, and have long supported the statutory regulation of the sector. We therefore welcome Government plans (contained in the Energy Bill introduced to Parliament in July 2022) to bring in such regulation.

In the meantime, the Government has said that: "We want the Heat Trust voluntary scheme to have an important role in preparing the industry as we move towards regulating the market, and we strongly encourage heat networks to register with the scheme now to prepare for regulation."

Customers on heat networks that are not registered with Heat Trust are not guaranteed that their supplier will meet minimum customer service standards or allow them to use an independent redress service, like the Energy Ombudsman.

If your heat network is not registered with us and you'd like it to be, then why not write to your supplier to ask them to do so?  We have developed a model letter you could sent here: Heat Trust registration template letter for residents

If you have recently moved in, please see our list of suggested considerations for prospective heat network customers, for some questions which you could ask your supplier to see what they do provide. These should all be set out in your customer supply agreement (terms and conditions of your heat supply, you should have received and signed this when you moved in) or customer charter (separate document listing key terms and conditions of your heat supply for if your heating bills are included in your rent).

In addition, you have some protections as a consumer from existing regulations and requirements.

Existing heat network regulations

All heat network suppliers have to abide by the existing regulations, which cover only metering and billing: the Heat Network (Metering and Billing) Regulations 2014.

Key points for you as a customer to know:

If you don’t have a heat meter:

  • You can ask your supplier if they’ve looked into installing a meter – suppliers are required to install meters where it is cost effective and technically feasible (there is a basic test to guide this, which is currently being developed) – with a meter you get more knowledge about and therefore control over your consumption
  • If heat meters aren’t cost effective or technically feasible, then a supplier must install a heat cost allocator (HCA) and thermostatic radiator valves (TRV) (this is a small electronic device fitted to your radiator which measures the heat output from that radiator, and the TRV should allow you to control the level of heat you consume)
  • If there is renovation going on to the building this is a key opportunity to install meters/ heat cost allocators

If you do have a meter (or HCA):

  • Where there are meters/ HCAs the supplier must ensure that they are continuously operating and properly maintained
  • You should be billed at least once a year based on actual consumption (rather than estimated consumption), as long as either you or your supplier has taken a meter reading
  • The bill must show how it was calculated, including both fixed and variable charges
  • You can request to get your bills electronically if you prefer, and then bills must be provided at least quarterly
  • Your bills should include at least:
    • Current energy prices charged to you
    • Information about your consumption
    • Comparison with last year’s consumption, if available, which should be as a graph
    • Contact information for organisations who could advise on energy efficiency improvements

 

Future heat network regulations

Both UK and Scottish Governments plan to introduce regulation of the heat networks market in the next few years.

Please see our Resources page for more information on future regulation in both the UK and Scotland. 

 

Landlord/ tenant rights (in England and Wales)

Some of this depends on who your heat supplier is. For example there are certain requirements that apply to social landlords, and others that apply if you are a leaseholder.

Landlords of all domestic rented properties must ensure that homes are fit for human habitation, and this includes a supply of hot water, and whether the home is too hot or too cold.

The landlord (private, council or housing association) is responsible for making repairs to heating and hot water. This is required under the Landlord and Tenant Act (1985). The procedure for dealing with repairs will vary depending on the housing provider, but they should tell you how long it will take to repair, and this will vary depending on the urgency of the problem (typically 4-24 hours for an emergency, 3-4 days for an urgent issue and 7 to 10 days or longer for a routine issue). Outages to heating and hot water may not be classed as emergencies, but some may make special provision for you if you are heat dependent e.g. elderly or ill. They may require a notification in writing (either letter or email). They may have additional requirements to these (statutory requirements) placed on them by the contract you have with them (contractual requirements), such as defining timings for undertaking repairs.

If they do not respond initially, try again, both in writing and via other means e.g. telephone. If they continue to be unresponsive you could contact the Environmental Health Department at your local council for assistance, as they enforce living standards in their local area.

If you are a leaseholder:

There are certain rules over what service charges the freeholder can demand from a leaseholder, which could be for repair/maintenance of heating/ hot water, and these have to be provided up front for the next 5 years and explain what maintenance etc. the freeholder is planning to do in that time with the money.

If you have a domestic letting under a short lease (< 7 years) the landlord must keep the equipment in the house used for space heating and hot water in working order and carry out repairs (Landlord and Tenant Act 1985, Section 11). As parts of heat network equipment lies outside of individual houses (e.g. pipes and energy centre) this may not be applicable to every issue with supply.

Landlords can also only pass on reasonable costs of maintenance and improvements to tenants, if they are charging in advance (Landlord and Tenant Act 1985, Sections 18 & 19).

Under most heat network supply agreements (if they’re longer than 12 months, charge over £100/year OR require over £250 contribution for works) then the Landlord needs to undertake a statutory consultation before passing on costs of works to the tenant (Landlord and Tenant Act 1985, Section 20).  

If you live in social housing/ housing association property:

If you are a tenant and you rent your property from the council or housing association, there are housing laws (Housing Act 1985, Section 108) that limit what local authorities can charge for heating to reasonable charges based on the cost of heating to the local authority. However this doesn’t apply if the interests of the landlord belong to a co-operative housing association.

If you’re in council housing and a repair is delayed you may be eligible for compensation under the Right to Repair Scheme.

If you’re in a housing association property then the housing association must ensure that your home meets certain standards, including that it is “warm enough”.

Landlord/ tenant rights (in Scotland)

If you rent privately:

If you rent privately from a landlord, your landlord must make sure your property meets the 'repairing standard'. This comes from the the Housing (Scotland) Act 2006, which covers the legal and contractual obligations of private landlords to ensure that a property meets a minimum physical standard. It includes that the installations for the supply of space heating and heating water must be in a reasonable state of repair and in proper working order.

The property must also meet the statutory Tolerable Standard. This includes that a home may not be fit to live in/ be tolerable if:

  • it does not have enough ventilation, natural and artificial light or heating
  • it does not have an acceptable fresh water supply, or a sink with hot and cold water
  • it does not have an indoor toilet, a fixed bath or shower, and a wash basin with hot and cold water.

If you live in social housing:

If you are a Scottish secure (or short secure) tenant of a local authority or housing association then you have the right to small urgent repairs under the Right to Repair scheme. This comes from the Housing (Scotland) Act 2001. The scheme covers certain ‘qualifying’ repairs up to the value of £350, including loss or part loss of space or water heating if no alternative heating is available. You should report the need for a repair as soon as possible to your landlord, who will be able to tell you if it’s their responsibility and falls under the scheme, along with how long it will take and what will happen if it’s not covered by the scheme.

If you own your home:

The Housing (Scotland) Act 2006 has introduced the 'scheme of assistance' in each council area, which means you could go to your local council for assistance in maintaining or repairing your house. This assistance can be provided through advice and guidance, practical help, or through financial assistance by way of grants or loans.

 

Other consumer protections

The Consumer Rights Act 2015 protects customers against unfair contract terms and notices. The CMA says that generally, contract terms and notices are unfair if they put the customer at an unfair disadvantage. The law applies a fairness test that starts by asking whether the wording used tilts the rights and responsibilities between the customer and the trader too much in favour of the trader. For more information see: https://www.gov.uk/consumer-protection-rights.

Competition Law can also apply as heat networks can act like natural monopolies, with only one heat network operating in a given area. In such cases there might be a risk of suppliers abusing a position of market dominance. The CMA have produced a series of quick guides and films that explain the main things suppliers need to know to stay on the right side of competition law, which might help you.

Also relevant might be the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013. These regulations set out what pre-contractual information must be communicated depending on where the contracts are concluded or offered, the right to cancel and cooling off periods among others.

There is also The Consumer Protection from Unfair Trading Regulations 2008. These regulations prohibit misleading actions or misleading omissions and the undertaking or promoting of unfair commercial practices.

 

Tariff options

Although you usually cannot switch supplier if you’re on a heat network, you might be able to switch tariff. Ask your supplier if they offer more than one tariff.

Some suppliers might offer tariffs which might work better for you and your consumption pattern, and might work better at different times of the year.

 

Financial support

You may be eligible to receive some money off your electricity bill if you meet certain criteria, for example you receive certain benefits and your electricity supplier is part of the scheme. This would not reduce your heating bill, however it would help with paying your overall energy bills. This scheme is known as the Warm Home Discount. Please see more details, including eligibility, here: https://www.gov.uk/the-warm-home-discount-scheme

You may also be able to request a ‘Breathing Space’ if you are struggling with debt. This would give you 60 days to sort your finances and give you access to professional debt advice. Please see more details here: https://www.gov.uk/government/news/new-scheme-to-give-people-in-problem-debt-breathing-space-launched

 

Complaints

You should always make your complaint directly to your supplier first. Their contact information should be provided on your bill, or in your agreement when you first moved in.

Top tips

  • Keep a record of all contact you have regarding your complaint, including dates, and preferably who it was you were in contact with.
  • It helps to know what you would like as an outcome of your complaint e.g. a change in service, an apology, a financial compensation.

If your complaint hasn’t been resolved and you’re still not happy you could:

  • Ask if your supplier uses an Alternative Dispute Resolution (ADR) service.
  • Tenants of housing associations and local authorities can take complaints to the Housing Ombudsman
  • Contact your residents association if you have one for your building/ area
  • See if anyone else in your building/ area is also having similar problems
  • Contact Citizens Advice, Shelter, Money Advice Trust, Step Change for advice or support (both CA and Shelter have specific websites/ advice for Scotland)
  • Contact your local councillor or MP
  • Contact the CMA if you think your supplier is not complying with competition law
  • Contact the Environmental Health Department at your local council for assistance in ensuring your landlord meets their obligations to repair/ replace your heating and/ or hot water if you rent your home

Heat Trust’s third annual report was published this week, revealing that they now provide protection to 10% of the market. Reflecting on the experience gained over three years, the report sets out key principles to consider as regulation of the market is developed.

Bindi Patel, Director at Heat Trust said:

“Heat Trust has been working to support the adoption of minimum customer service and protection standards across the heat networks sector since 2015. Regulation is an important next step. With ambitions for a significant proportion of homes and businesses to be served by heat networks, it is essential that heat networks provide reliable low carbon heat and that customers receive the same protections as other energy customers.”

Other principles identified include the need to ensure consistency between different nations as Scotland proceeds with its plans for heat networks regulation, focusing on customer outcomes to allow flexibility on how services are delivered, and integration with wider regulatory developments. Bindi noted:

“Regulation of heat networks is taking place during a time of rapid transition across the energy market. It is important that heat network regulation is considered alongside other regulatory changes in the energy market, and that customers on heat networks can access and benefit from future innovation.”

The report provides a summary of performance of heat networks registered with Heat Trust over the previous year, revealing that technical issues, billing and charges were the most frequent issues raised by customers. Over the year:

  • There were 4,657 complaints recorded by Registered Participants
  • The majority of complaints related to technical issues (42%) followed by billing and charges (34%)
  • There were 63 planned interruptions and 745 unplanned interruptions
  • The majority of unplanned interruptions were due to issues affecting generation equipment

Variation in how different suppliers collect performance data emphasises the need for industry-wide performance metrics – a call first made by Heat Trust in its inaugural annual report.

This report also provides details on complaints that were received by the Energy Ombudsman. The data from the Energy Ombudsman covers 1st January 2018 – 31st December 2018. During this 12-month period:

  • There were 83 complaints within the Ombudsman’s terms of reference (TOR)
  • The majority of complaints were due to billing (60%)
  • Of complaints within the TORs, 63% were upheld by the Ombudsman and a further 23% reached a Mutually Acceptable Solution
  • A goodwill payment was awarded in 72% of cases, the average award was £105.61

For the first time, Heat Trust has been able to include data on debt and supply suspensions. The report notes that this is an area of importance and in particular, identifies areas for improvement to support debt management.

“Our work has focused on setting minimum standards and collecting data to build a picture of current practices. We continue to work with stakeholders across the market to support the sector and champion good outcomes for heat network customers. A government consultation setting out the first proposals on heat network regulation is expected next year. We look forward to sharing our experience and knowledge with stakeholders, governments and indeed a future regulator to support development of a robust regulatory framework.”

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