Financial support for heat network customers

As part of the Spring Budget, the Chancellor announced that additional support with energy costs would be provided to heat network customers worth £380 million, or around £860 for the average heat network customer. Heat network customers are not protected by Ofgem’s price cap and have therefore faced energy bill increases of up to 700 per cent since the beginning of the energy crisis.

On 23 March, the Department for Energy Security and Net Zero (DESNZ) hosted a webinar to provide further information about how the scheme will work. CIH’s policy and practice officer Matthew Scott attended the webinar to provide a summary to our members who support with heat network customers, or who work with heat networks as part of their role.

What does the scheme look like?

The Energy Bills Discount Scheme (EBDS) will provide heat network customers with a higher rate of energy bill support from 1 April, covering the period from 1 April 2023 to 31 March 2024. The target rate contracts will be subsidised to £78.30/MWh for gas and £340/MWh for electricity, and the indicative timeline presented by DESNZ is as follows:

• April 2023: The online portal will open at the beginning of the month, followed by passing of necessary legislation to enact the EBDS
• May/June 2023: The first applications will be confirmed
• June/July 2023: The first discounts will be received by suppliers
• August 2023 onwards: The discounts will begin to be passed on to heat network customers.

Eligible heat network suppliers with domestic customers will be required to apply for higher EBDS support through an online portal, which will open at the beginning of April. DESNZ intends for successful applicants to be provided with an eligibility certificate, which will be supplied to both the heat supplier and the energy supplier. This will enable energy suppliers to identify which heat networks will need to receive the higher EBDS rate and support heat suppliers to pass the discount on to customers.

The application and registration process

The application process for heat supplies will work as follows:

• Heat suppliers will apply for increased discount via the online portal
• Heat suppliers will be asked for mandatory information on their heat network so verification checks can take place
• Subject to verification, they will receive a qualifying heat supplier certificate
• Finally, the details of the qualifying heat supplier will then be passed to their named energy supplier.

Every eligible heat network will require its own application to be made by a heat supplier. To complete an application, DESNZ will require:

• The applicant contact information
• Details of the heat supplier
• Details of the heat network, including the name and postcode of the network’s energy centre
• Details of the energy supplier for the network, including its meter numbers
• A signed declaration letter from the heat supplier (DESNZ aims to provide a template).

This will enable DESNZ to match a heat network to its existing database. If this does not work, applicants will be asked for additional proof of eligibility (e.g. residential agreement, domestic heat supply contract).

Pass through requirements

DESNZ expects the pass through requirements to be similar to the Energy Bill Relief Scheme, the previous mechanism for providing support to heat network customers. Heat suppliers will need to inform their customers how much benefit they received and how it will be passed through within 30 days of receiving support.

Once registered and verified as eligible, DESNZ will also issue additional guidance and resources that will help heat suppliers communicate the details of the pass through to their customers.

Complaints and enforcement

DESNZ have noted that if customers do not feel that the support has been passed through in a satisfactory manner by their heat supplier, they should contact their heat supplier to raise their concerns in the first instance.

Customers in Great Britain will be able to raise a compliant with the Energy Ombudsman if their issue is not satisfactorily resolved. Customers in Northern Ireland will be able to do the same to the Consumer Council for Northern Ireland (CCNI). Heat suppliers will not face case fees for complaints that are investigated.

Next steps

Further details about the EBDS and its applicability to heat network customers are expected in due course, and some more information about the EBDS can be found here.