Help with heating and energy costs for heat network customers

The UK government has introduced some support schemes to help domestic energy customers (i.e. householders) through the current energy price crisis and particularly this coming winter of October 2022 to March 2023. There are also existing support schemes for certain customers e.g. those on benefits or receiving a pension, to help them with energy payments. Most are applicable to heat network customers who have a standard domestic electricity supply, but here we describe the key support schemes and how they apply to heat network customers.

Government support schemes

General government information on energy cost support is available here and more general information on cost of living help is available on a separate government ‘Help for Households’ website here.

Below we look at the energy cost support schemes and how they apply to those on heat networks.

Energy Bills Support Scheme (EBSS)

The Energy Bills Support Scheme provides a £400 discount to eligible households to help with their energy bills over winter 2022 to 2023.  This is being paid automatically via reduced domestic electricity bills in October 2022 to March 2023.

Households that are on a communal electricity supply (or 'private wire' scheme) are now (Feb 23) able to recieve the £400 Energy Bills Support Scheme Payment via an Alternative Fund.  Online applications for households in England, Scotland and Wales who are eligible for the £400 EBSS Alternative Funding can be made here. Payments to households that meet the eligibility criteria – including people who get their energy through a commercial contract or who are off-grid – will be made by local authorities in Great Britain.

Energy Price Guarantee (EPG) - domestic electricity bills

The Energy Price Guarantee will reduce the unit cost of domestic electricity and gas this Winter.  It will be in place from 1 October 2022 until 31 March 2023. The average unit price for dual fuel customers on standard variable tariffs, subject to Ofgem’s price cap, paying by direct debit will be limited to 34.0p/kWh for electricity and 10.3p/kWh for gas, inclusive of VAT, from 1 October.  A review will be launched to consider more targeted measures to support households with their energy bills after this period.

Most heat network customers will benefit from the EPG in relation to their electricity bills (unless they are on a communal electricity/private wire supply), however heat networks buy their gas as non-domestic or commercial customers, so (like the previous price cap) this scheme does not apply to heat network prices for heating and hot water.

Energy Bill Relief Scheme (EBRS) - heat and hot water bills

This scheme will provide energy bill relief for non-domestic customers (including heat networks) in Great Britain. Discounts will be applied to energy usage between 1 October 2022 and 31 March 2023.

The scheme reduces the price paid for energy by non-domestic customers (such as heat network operators), and new legislation makes it mandatory for heat network operators to pass on the benefit of these reduced prices to their customers and must notify their customers of how they are doing this.  For more information on how this pass-through will work, see government guidance.  Customers that believe their heat supplier is failing to properly pass on the benefit of this scheme can complain to their heat supplier and the government has provided a template letter for doing so. If they are still not satisfied with their supplier’s response, then they can complain to the Energy Ombudsman, who can provide independent redress.

The impact of the scheme on end user prices will vary depending on the gas contract supply arrangements and the overall efficiency of the heat network.

This scheme will also apply to electricity prices for those on communal electricity/private wire schemes.

Heat Networks Energy Bills Discount Scheme (EBDS) - heat and hot water bills

The Government has announced that from 1st April 2023 a new, and significantly improved, heat network support scheme will be available to heat networks that will ensure that (in most cases) operators won't have to pay above 6.83p/kWh for gas and 34p/kWh for electricity. The government says that this scheme is estimated to be worth up to £380 million in total, £860 for the average heat network customer.

Operators will have to register with a government online portal (from early April) in order to get a certificate to present to their energy supplier to receive the discounted rate. This should see most heat network tariffs fall significantly, although we estimate that many will still be paying around 50% higher unit rates for heat than domestic gas customers. Like the current EBRS, operators will have to notify customers of the discount and how they are applying it to heat bills.  Customers will also be able to complain to the Ombudsman if they believe their operator fails to do this.

Means-tested support

Cost of Living Payment

An extra payment to help with the cost of living if you’re entitled to certain benefits (including the state pension) or tax credits. If you’re eligible, you’ll be paid automatically in the same way you usually get your benefit or tax credits. This includes if you’re found to be eligible for a Cost of Living Payment or a Disability Cost of Living Payment at a later date.

You could get up to 3 different types of payment depending on your circumstances on a particular date or during a particular period:

• Cost of Living Payment, if you get a qualifying low income benefit or tax credits
• Disability Cost of Living Payment, if you get a qualifying disability benefit
• Pensioner Cost of Living Payment, if you’re entitled to a Winter Fuel Payment for winter 2022 to 2023

These payments are not taxable and will not affect the benefits or tax credits you get.

Warm Home Discount Scheme - opens 14 November 2022

Eligible customers could get £150 off their electricity bill for winter 2022 to 2023 under the Warm Home Discount Scheme.

To qualify for this scheme you need to be either in receipt of the Guarantee Credit element of Pension Credit, or on a low income and have high energy costs (or in Scotland meet your energy supplier’s criteria for the scheme).

Cold Weather Payment

This is paid to those in receipt of certain benefits (such as Pension Credit, Income Support, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, and Universal Credit) during periods of very cold weather.  You’ll get £25 for each 7-day period of very cold weather between 1 November and 31 March.

This is paid automatically to those eligible, but it is important to make sure that you notify Jobcentre Plus if you have a baby or child under 5 living with you and are in receipt of benefits, as you might not otherwise get paid this automatically.