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Introduction
In the Energy Prices Act 2022, the Government has established a requirement that any energy price support is passed on to consumers. (See government guidance).
This means that intermediaries, in receipt of support from the Energy Price Guarantee, Energy Bills Support Scheme, the Energy Bill Relief Scheme (EBRS), or the Energy Bills Discount Scheme (EBDS) pass the benefit obtained to consumers, as the intended beneficiaries of the relevant schemes.
Heat networks usually purchase energy to supply heat through commercial contracts. As non-domestic consumers, heat networks suppliers will receive support from the EBRS for energy use between 1 October 2022 and 31 March 2023. Eligible heat networks with at least one domestic consumer will receive a higher level of EBDS support for energy usage from 1 April 2023 and 31 March 2024. These schemes reduce the wholesale gas and electricity unit prices for commercial energy suppliers and therefore reduce the prices that they offer to the market.
The Energy Bill Relief Scheme Pass-through Requirement (Heat Suppliers) (England and Wales and Scotland) Regulations 2022 (‘the Regulations’) introduce requirements on heat suppliers including:
- to pass on the benefit of the EBRS to end consumers and provide consumers with information on how the passthrough will be affected.
- to register to the redress scheme, administered by the Energy Ombudsman, which will allow heat network consumers to raise a complaint if they have not received the benefit of the EBRS.
The Energy Bills Discount Scheme Pass-through Requirement (Heat Suppliers) Regulations 2023 (GB and NI) introduce requirements on heat suppliers including:
- to apply for a specific higher EBDS rate through the EBDS Application Portal by 25 July 2023.
- if they receive a higher heat network discount rate under EBDS, to pass on the benefit to end consumers on heat networks with at least one domestic end user.
- if they receive a higher heat network discount rate under EBDS, to provide consumers with information on how the ‘pass-through’ will be effected.
- if they have not already done so under EBRS , to register to the redress scheme, administered by the Energy Ombudsman, which will allow heat network consumers to raise a complaint if they have not received the benefit of the EBDS
What does this mean for heat network consumers (domestic consumers and microbusiness consumers)?
The legislation places certain requirements on your heat network supplier. There are a number of grounds under which you can raise a complaint if your heat network supplier has not done what is required of them by the EBRS and EBDS legislation.
If this is the case, then in the first instance you should contact your heat network supplier and ask them to fix the situation. If you cannot come to an agreement with your heat network supplier, you can raise a complaint with us, the Energy Ombudsman.
Under the EBRS you can make a complaint on the following grounds, if your heat network supplier has not:
(a) notified you that it has benefited from the EBRS;
(b) notified you of how it will pass through the benefit from the EBRS;
(c) passed on the EBRS scheme benefit within the timeframe required by the Regulations;
(d) otherwise complied with the requirements to pass through the EBRS benefit.
Under the EBDS you can make a complaint if your heat network supplier has been provided with the higher level of heat network EBDS support, and has not:
(a) notified you that it has benefited from the EBDS;
(b) notified you of how of when it will pass on the benefit of the higher heat network EBDS discount rate to you;
(c) passed on the EBDS scheme benefit within the timeframe required by the Regulations; (d) otherwise complied with the requirements to pass through the EBDS benefit.
What this means for heat network suppliers
We appreciate that needing to sign up to our redress scheme introduces some changes for heat network suppliers and that these won’t happen overnight. We will be setting up a dedicated team to answer any questions and provide support.
The EBRS will apply discounts to energy usage between 1 October 2022 and 31 March 2023. If a heat network supplier was benefiting from the EBRS on the date the Regulations came into force (1 November) they will have until 30 November to communicate out to their consumers with details on the reduction of their bills and how this will be applied. Heat network suppliers who benefit from the EBRS after the Regulations came into force will have 30 days from the point they received the benefit to meet the above provision of information requirements.
The EBDS will apply discounts to energy usage between 1 April 2023 to 31 March 2024. All heat network suppliers will have until 25 July to apply for the higher level of heat network EBDS support via the EBDS portal if their heat network:
- supplies heating or hot water to a building or persons in that building
- is supplied by a licenced energy supplier
- supplies at least one domestic customer
- uses gas or electricity for producing heat
Only once an application has been approved will a heat supplier receive the higher level of heat network EBDS support and be able to pass this on to consumers. For heat suppliers with heat networks that were eligible from 1 April, support will be backdated to this date.
Heat network suppliers will have 30 days from receiving the EBDS, or by 26 May (whichever is later) to communicate out to their consumers with details on when and how it will reduce their bills.
If something goes wrong and consumers do not receive relevant communications or the pass through then consumers will first speak to you, their heat network supplier. You can then work with your consumer to resolve the situation to the satisfaction of your consumer. You will have up to eight weeks to do this. If you can’t resolve the complaint to your consumer’s satisfaction then your consumer can come to us with their complaint.
Given the speed of introducing the requirements in the legislation, we will take a sensible approach to signing heat network suppliers up to our redress scheme and work with you on that. We propose that if a complaint is raised by one of your consumers then at that point we will contact you to first engage with you on that complaint and secondly to sign you up to the redress scheme. However, if you wanted to, you can ask to be signed up to the redress scheme earlier. But we appreciate that your key priority will be to provide your consumers with the relevant information as outlined in the legislation.
Getting in touch with us
We will be providing answers on these pages to assist you with complaint handling and support you signing up to the redress scheme, so please do continue to visit these pages.
If you have any questions about the redress scheme, what our role is and how we work, or if you would like to sign up to the redress scheme now then please contact us at HeatNetworks@energyombudsman.org.