Social landlords operating heat networks now subject to greater regulation

Social landlords that operate district or communal heating systems are from this week subject to new regulations aimed at improving protections for customers.

A regime enforced by Ofgem has oame into effect to regulate 14,000 heat networks, around two-thirds of which are estimated to be in the social housing sector. This means social landlords operating heating systems are now treated as regulated energy suppliers, while residents will have access to the Energy Ombudsman to resolve disputes.

The regulations mean landlords will be required to meet standards of conduct on how they treat consumers, covering customer service, engagement and being transparent and clear when sharing information, including billing. Ofgem will have powers to act if a heat network operator puts up prices unfairly and will be able to fine an organisation up to 10% of its turnover.

All heat networks will need to have registered with Ofgem for regulation by January next year.

Networks will also be subject to technical standards setting out areas such as pipe insulation and water flow temperatures. The Department for Energy Security and Net Zero (DESNZ) is currently consulting on these. Regulations are also expected to be laid in parliament in the spring covering heat network zoning. DESNZ said local communities will have the tools to accelerate the development of heat networks.

Matthew Scott, policy manager at CIH, said: “With over half of existing heat networks falling in the social housing sector, it is vital that housing providers engage with the regulation, to understand if they are in scope and what they need to do to be compliant”. Scott said the lack of regulation to date has left people at risk of unfair pricing with limited avenues of redress when things go wrong.

The National Housing Federation last week set out immediate actions its housing association members should take. These include identifying how many heat networks they have, making sure they are aware of the requirements and registering with the Energy Ombudsman.