What you need to comply with

In addition to the overarching requirement in the Standard of Conduct to ensure information provided to consumers is accurate and clear, there are other specific authorisation conditions relating to transparency. These are:

• Heat supply contracts. This will oblige heat network suppliers to supply heating, cooling, and/or hot water via a heat network following a request from a relevant consumer. In turn, this will need to involve the exchange of a heat supply contract between the supplier and consumer. Note however that where a relevant lease applies, this condition is not applicable; but the heat network supplier will still need to comply with any relevant housing regulation.
• Contract changes information. This will oblige heat network suppliers to provide notices to consumers before a contract variation or increase to charges are implemented. They must give consumers at least 31 days’ notice of any changes that would be disadvantageous (e.g. an increase in heat charges), and variations are restricted to once in any six-month period. The authorisation condition lists what a Contract Change Notice must include.
• Assistance and advice. Heat network suppliers will be required to provide consumers with information to advise them of their rights, especially in relation to dispute resolution. This includes details on how to raise a concern or complain, and how to seek impartial advice from a consumer body.
• Provision of billing and price transparency of information. Lastly, this authorisation condition will introduce requirements on heat network suppliers for issuing bills and billing information to metered and unmetered consumers. A bill based on actual consumption must be issued once a year, with clear information on how it has been calculated. Note that in supported accommodation, almshouse accommodation, purpose-built student accommodation or certain premises subject to a leasehold interest, it is stated only that this requirement should be met as far as reasonably practical.

The fair pricing authorisation condition will introduce a requirement for heat network suppliers and heat network operators to ensure that charges are fair and not disproportionate. There will also be a linked authorisation condition on cost allocation applying to heat network suppliers and heat network operators, which will impose a requirement that heat charges are structured in a way that is consistent with being fair and not disproportionate. This condition will also stipulate that a heat network must not recover any fines or compensations through heat charges.

Ofgem consulted on its approach to fair pricing in 2025. Along with our partners at the National Housing Federation and The Heat Network, we raised concerns about the unintended consequences of Ofgem’s proposed approach.

Ofgem subsequently published its decision, and has stated that it will publish detailed finalised guidance to support heat networks to comply with the authorisation condition. Draft guidance has already been consulted on, and we await the final version. Heat networks will be required to use this guidance to ensure that their pricing policy and heat charges are fair and not disproportionate.

It is clear that more clarification will be required from Ofgem on the possible overlap between fair pricing and housing legislation, especially the Landlord and Tenant Act (1985). Many social housing providers include heat charges within service charges, and it is not clear how Ofgem’s approach to this will operate. Previously, Ofgem have considered requiring the separation or ‘unbundling’ of heat charges from wider service charges, which would provide residents with more visibility over what they are paying for heat, but be administratively challenging for social housing providers. We will update this guide when we have further information on this.

As heat network regulation begins, the only previous legislation – the Heat Network (Metering and Billing) Regulations (2014 – amended in 2020) – will be folded into the new regulatory regime through the Heat Network Technical Assurance Scheme (HNTAS).

Previously, heat network suppliers were required to submit information to the Office of Product Safety and Standards (OPSS). From 27 January 2026, they will instead need to submit registration and compliance data to Ofgem once Ofgem’s digital service launches (expected in spring 2026). This is because as Ofgem’s authorisation regime commences parts of the Heat Network (Metering & Billing) Regulations 2014 (as amended) will be revoked. Meter installation and accuracy obligations remain in place for heat suppliers, unless exempt, until HNTAS is in effect.

Note however that the Heat Network (Metering and Billing) Regulations 2014 (as amended) will continue to apply in Northern Ireland until Northern Ireland’s own legislative process and regulatory reforms have taken place.

HNTAS will introduce new technical standards for heat networks that will include new metering requirements. Following a long development process, the government has published the draft technical standard. While a positive step towards efficient, affordable, low-carbon heat networks, how the upgrades to existing heat networks will be paid for remains uncertain; costs for the social housing sector alone could run into the billions of pounds. CIH is active in discussing these costs with government, along with our sector partners.

With regards to billing, there is a significant authorisation condition on back billing for heat network suppliers. This will set requirements on how heat network suppliers are permitted to back-bill heat network charges. This will be limited to 12 months, except where these charges are part of a service charge to which the Landlord and Tenant Act (1985) (or equivalent legislation) apply.

Following the approach taken in the energy retail market, Ofgem is introducing requirements relating to vulnerability. These are:

• Priority services register. This will oblige heat network suppliers to develop and maintain a register for consumers who may require additional or priority support due to their personal circumstances or being in a vulnerable situation. They will also need to promote the availability of this to consumers.
• Security deposits, payment difficulties, disconnections, direct debits and final bills. This will oblige heat network suppliers to put in place a range of support functions for consumers, especially offering support when they are in payment difficulty, placing restrictions on disconnection due to non-payment of charges, and others.
• Prepayment meters. This will introduce a range of requirements linked to prepayment meters for heat network suppliers, especially restrictions on installing a prepayment meter, or on switching a meter to advance payment mode on an involuntary basis.
• Self-disconnection. This will place a broad obligation on heat network suppliers to identify when consumers might be self-disconnecting from supply, and offer support if they are.
• Social obligations reporting. Heat network suppliers will be required to collate and submit specific information on the above to Ofgem, Citizens Advice, Citizens Advice Scotland and Consumer Scotland.

There are no proposals to exempt social housing providers from these obligations.

The authorisation conditions will introduce requirements on heat network suppliers to handle and record complaints. Social housing providers are used to this kind of mechanism due to the parallel role played by the Housing Ombudsman’s Complaint Handling Code of practice in the sector.

Practically, this means that heat network suppliers will need to have a complaints procedure in place, and be compliant with it. It will need to contain specific features, which are set out in the authorisation conditions, but which are similar to those set out by the Housing Ombudsman. If a complaint is not resolved or a consumer is not happy with the outcome, they will be able to complain to the Energy Ombudsman.

Social housing providers will not be exempt from the requirement to have a complaints procedure and policy, even if they have a policy that is deemed fully compliant with relevant regulations for the social housing sector and the Housing Ombudsman’s Complaint Handling Code.

Providers will also not be able to assume that their existing complaints handling procedure and policy is automatically suitable for the purposes of heat network regulation. Any existing procedures and policies will need to be reviewed, amended, and checked to ensure they fully meet the requirements of heat network regulation.

A security of supply authorisation condition will require heat network operators only, not suppliers, to ensure a reliable and consistent supply of heating, cooling or hot water, and take steps to minimise outages and disruptions.

Previously, Ofgem and DESNZ consultations have included proposals for introducing Guaranteed Standards of Performance, or GSOPs, in the heat network sector. If introduced, consumers would be automatically eligible for redress in the form of compensation if their heating and hot water supply was disrupted, or failed to meet the GSOPs in any other way.

Ofgem and DESNZ are continuing this work and undertaking further analysis, stakeholder engagement, and research. CIH and our sector partners have previously raised that, in the not-for-profit social housing sector, compensation payments may be problematic, as they will be funded from rent or heat charges, not profits. At the same time, we have recognised that all consumers should have access to fair and appropriate redress for poor heat network performance.

We will continue to work with Ofgem and DESNZ to understand the advantages and disadvantages of introducing GSOPs, and inform members when a decision has been reached.

Lastly, there are a set of authorisation conditions that broadly relate to the stability and continuity of supply. They apply only to heat network operators. They include authorisation conditions on:

• The nominated operator.
• Compliance with independent audit requirements.
• Operational arrangements and material assets.
• Availability of resources and financial responsibility, to ensure operation can continue.
• Continuity arrangements.
• Revocation, or the circumstances where Ofgem may revoke authorisation in whole or in part.