Flat owners feeling heat over energy
HOMEBUYERS, especially those of new-build flats, beware. Before you complete do you know how your heating is being supplied and why you should care? There’s good reason, because should you spot terms such as “heat network” or “district/communal heating”, be warned. There could be trouble ahead – and no escape either.
The system, a lower-carbon alternative to gas piped in by local generators to neighbourhoods, estates and apartment blocks, has the laudable purpose of cutting emissions. It now supplies a growing number of households, about 450,000 at present, through some 14,000 networks.
But unlike the main energy market that is regulated and tasked with protecting the interests of consumers, these systems aren’t and some don’t stand up well to scrutiny.
They’ve come in for a lot of criticism over how they are run at the consumer end and the potentially poor deals some offer, not least because customers are left in the dark as to what they’ve been signed up to.
Main drawbacks include long contracts (20 years or more) that rule out any consumer choice about switching, lack of transparency over who runs what, delays in billing and unclear statements that mask whether charges and prices are fair and competitive and whether a system is being run as efficiently as it could be. There are also serious questions for estate agents and developers over how heat-network properties are marketed and whether prospective buyers are sufficiently well informed.
Concerns about price, quality and service led Government watchdog the Competition and Markets Authority (CMA) to step in a few months ago and its final report on what needs to be done to improve the system is expected this week.
Its study raised concerns about design and build where developers put solutions for planning requirements ahead of those of customers and cut upfront costs of installing a network. This has led to higher operating ones – with customers footing the bill.
The CMA also highlighted worries around monopoly of supply and poor transparency. The likelihood is it will recommend regulation for all and more clarity and also indicate that customers in private networks get the worst deals.
Its moves have been welcomed by Citizens Advice and consumer group Which? both of whom are calling for tougher action. But protections will take time to come into force and won’t be backdated.
Those in district and community systems with suppliers belonging to the voluntary Heat Trust scheme can take complaints to the Energy Ombudsman but its powers are limited. For public housing it’s the Housing Ombudsman. Private home owners have fewer options, although under consumer law prices and service standards must be “reasonable”.
Crusader has received numerous complaints from leaseholders who have not received a bill for more than a year, are still not confident whether what they have got is accurate or an estimate, find it difficult to know if their charges and unit prices are competitive and did not have the system explained to them before they moved in.
Worryingly, concerns about getting into conflict with the managing agents of their blocks and those in charge of the schemes deterred them from speaking openly.