Written 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 our contact 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 for heat network customers, 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 occur.

Contents

Heat Network (Metering & Billing) Regulations 2014

Heat Trust Scheme Rules

Current DESNZ initiatives

Future Ofgem regulation

What to expect from upcoming regulations

What is Insite Energy doing in the meantime

Heat Network (Metering & Billing) Regulations 2014

Heat networks are currently 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, building owners and managers who are in charge of a heat network must install energy meters at both the point of entry to the building, and in final consumer properties i.e., your home. This allows us, as the metering & billing provider, to accurately charge you for the energy you use. 

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 practice guidelines on the services that heat suppliers  must provide to their residents, crafted using Ofgem’s existing regulations for gas and electricity suppliers.

Unfortunately, the protections granted by Heat Trust are only applicable to heat suppliers who register individual heat network developments up to the scheme.

While Insite Energy cannot directly apply for membership to the Heat Trust, we continuously stive to align with its guidelines 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, focusing 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, the 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, as a metering, billing and maintenance provider, 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) 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:

While the EBDS has now ended, if you think your heat supplier failed to apply the discount to your heat tariffs at any time between 1st October 2022 and 31st March 2024, you should reach out to your heat supplier. If this cannot be resolved by them, you can further escalate this to the Energy Ombudsman. Any heat suppliers who have not complied may be persecuted under the Energy Prices Act 2022.

To understand any changes to your energy tariffs following the end of EBDS on 1st April 2024, be sure to read our blog post, where you’ll find useful resources to help you navigate this transition.

Future Ofgem regulation

Due to commence in 2025, Ofgem are soon to step in as the regulator of heat networks. This is a significant change aimed at enhancing customer protections and ensuring fair practices in the industry. Consultations to help set the regulations have been under way since 2023 and are expected to be fully implemented in 2026.

What to expect from upcoming regulations

Back-billing: Heat suppliers may no longer be able to bill customers for energy used beyond the previous 12 or 18 months (the timescales soon to be confirmed) except where the customer is at fault or under specific regulations.

Tariff change notification: Notification must be given 30-days before energy tariffs are increased. Where notifications aren’t sent, we act under instruction of your heat supplier.

Vulnerable customers: Customers classed as vulnerable will be given tailored support through new priority services, which is likely to extend beyond what is currently offered by the Heat Trust scheme.

Fair pricing: Heat suppliers may be required to provide clear and detailed information about their pricing structures to Ofgem who may then publicly publish national price data for heat networks.

What this means for you: 

• You would have access to transparent pricing information, helping you understand how your heat tariffs compare to other similar heat networks or heating sources. The benchmarking method to determine this is still to be confirmed.

Digital platform for heat network regulation: Ofgem is developing a digital platform to support regulatory activities and improve oversight of heat networks. This platform will require heat suppliers to regularly report key performance indicators.

What this means for you: 

• The platform will ensure greater focus and monitoring of your heat network's performance by your heat supplier. Reporting requirements, such as response times to refunds, complaints, and unplanned outages, will lead to better accountability and quicker resolution of issues, providing you with a more reliable service.

Ofgem's step-in rights: With the new regulatory framework, Ofgem will have step-in rights, which means they can intervene if a heat supplier fails to meet their obligations or goes out of business.

What this means for you: 

• This will ensure that your heat network is managed fairly by your operator and supplier, and in the extreme event that a change in ownership is required, that your heat supply remains uninterrupted over this switch. Your heating service will be protected, even if your current supplier faces operational difficulties. Ofgem will step in to ensure continuity of service, giving you peace of mind.

What are the timescales of regulation coming in?

What is Insite Energy doing in the meantime?

DESNZ and Ofgem are working hard to bring transparency, fairness, and accountability to the industry. With change on the horizon, Insite Energy are actively taking part in navigating these unchartered waters to ensure smooth sailing into regulation. How?

We are actively participating in Ofgem’s consultations to advocate for our residents’ best interests. Prior to this, we have worked together with industry bodies, including DESNZ and the UK District Energy Association (UKDEA), to escalate issues faced by heat network consumers. We also help clients to adhere to Heat Trust Scheme Rules where possible.

Ahead of the expected 2025 changes, to ensure our customers receive the best possible service, the Customer Service Team and I have been continuously reviewing our internal systems and processes. Our goal is to ensure we meet the new regulatory standards, with a focus on improving our transparency and support to customers. 

We remain committed to keeping you informed as these regulations take shape and I want to assure you that your experience as a customer remains a top priority for Insite Energy.