As Ofgem’s latest price cap sends average household energy bills to their lowest level in two years, a consumer body is sounding the alarm for more than half a million households who will miss out on the guarantee of lower bills following the withdrawal of a Government support scheme.
Households living on communal and district heating networks – a key part of the government’s plans to deliver low-carbon heat to the UK – are currently excluded from any protection created by the price cap.
The Energy Bill Discount Scheme, created to provide equivalent support, ended on 31 March, leaving families exposed to unrestricted prices dictated by the wholesale gas market.
Heat Trust, the national consumer champion for homes on heat networks, has written to Energy Minister Lord Callanan to call for an urgent extension to the scheme.
It points out that official data on payments made to energy suppliers under the scheme show that less than 15% (£55.5m) of the originally allocated £380m had been spent after 10 of the 12 months of the year. This data also suggests that only around 2,550 heat networks had their electricity and gas costs supported, out of the 9,000 plus UK heat networks with domestic customers.
Heat Trust also say that they are still hearing of many cases of customers paying heat tariffs at rates as high as 50-80 p/kWh, which could equate to bills of over £5,000 per year for heating alone.
Even as energy wholesale prices fall, many heat network consumers will not feel the benefit for some time as their providers may be locked into long-term fixed-price contracts, something the support scheme was designed to mitigate. Heat network operators (usually the building owner/freeholder or their appointed energy company) buy gas for communal boilers on the commercial gas market, before converting it to heat for households.
Stephen Knight, Heat Trust’s director, said: “When the Energy Bill Discount Scheme was launched, the government said that it would ensure heat network customers would not face disproportionately higher energy bills than other households. Sadly, for many of the country’s 500k heat network customers, this has not been the case.
“While the majority of households are finally seeing the cost of their energy bills starting to ease, many families in homes supplied by heat networks are still experiencing much higher prices as they remain unprotected by the price cap and pay for heat based on the historic wholesale cost of gas.
“We have called on the government to urgently extend the scheme for a further year, ensuring that help reaches more heat network customers in need of support.
At the very least”, Knight went on, “we need to ensure that everyone entitled to support in 2023-24 receives the money that they are entitled to, and that enforcement action it taken against suppliers who have failed to apply on behalf of their customers.”
The Heat Trust launched in November 2015. It sets out common standards for levels of customer service which heat suppliers should provide their customers.
It also affords consumers on heat networks registered with the scheme access to the Energy Ombudsman for settling complaints between customers and their heat supplier. Registered networks re listed here.
