• Over half a million families on communal and district heat networks excluded from Energy Price Guarantee – with some facing bills of over £500 a month
  •  Families on heat networks with communal electricity are yet to receive a penny of government support despite repeated promises

 A consumer champion is calling for the government to deliver on its promise of support for more than half a million families who are not protected by Ofgem’s new price cap or the Energy Price Guarantee.

Heat Trust, the consumer body for people living on communal and district heat networks, says that, without price cap protection, some families are paying more than £500 a month in bills.

To make matters worse, although the majority of households are about to receive the final payment of the £400 electricity bill discount scheme, families on heat networks with communal electricity are only just able to apply for financial help. Until now, they have been excluded from the Energy Bills Support Scheme.

It means people living in homes on heat networks, in park homes, or other off-grid homes without a contract with an energy supplier have been left ‘in the cold’ without help over the energy price crisis.

Heat Trust is urging the new Energy Security and Net Zero department to prioritise a proper support package for heat network customers.

Speaking on the new price cap, Stephen Knight, Director of Heat Trust, said: There is already concern over how households will be able to cope with another rise in energy prices on 1st April, but many families on heat networks are already paying at least two to three times as much for their heat as those with domestic gas boilers.

“It adds insult to injury that the majority of households are receiving their final £66 electricity discount payment next month, and yet families with communal electricity are only now being invited to apply for the funds and still may not see a penny for months to come.

“I urge the Government to make extra support a priority in the upcoming Spring Budget."

Ofgem has announced that from 1st April, its price cap would result in average energy prices being capped at £3,280, although the Energy Price Guarantee currently replaces the price cap and is expected to limit average annual energy bills from 1st April to £3,000, with average gas unit costs expected to be around 12.4 p/kWh.

In contrast, some families on heat networks are receiving bills as high as 53 p/kWh for heating and hot water.

Why are heat network customers excluded from the price cap?

Heat networks are not currently regulated by Ofgem and the price they charge for heat is not subject to any price cap. The network operators (usually the building owner/freeholder or an appointed energy company) buy the gas for the communal boilers on the commercial gas market, before creating heat for the homes.

In the past, companies could buy gas more cheaply than individual domestic customers. With commercial gas prices largely unprotected by caps or price guarantees, this is no longer the case and the operators then pass on the high prices to their heat customers.

In July 2022, the Government introduced an Energy Bill into Parliament appointing Ofgem as the regulator for the fledgling heat network industry to ensure fair prices and a reliable supply of heat.

Heat Trust and Ofgem have already been working together to design the regulation for heat networks, but a price cap or similar pricing measure is not likely to be in place for several years.