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Consumer protection body Heat Trust has called on the government to apply the price cap to the heat network market as soaring gas costs see consumers’ bills rise by 700%.
Under current rules, the price cap does not apply to heat networks and operators have to buy gas on the commercial rather than domestic markets.
According to Heat Trust commercial gas prices are currently around four times pre-crisis levels. In 2021, commercial gas saw a ten-fold price increase, rising from 1.5p per unit to 15p before Christmas, but is currently hovering between 6p and 7p per unit.
As such, the consumer body has warned that urgent action is needed to protect the half a million homes that are currently on communal and district heating networks which, despite being seen as a core component of the UK’s net zero ambitions, remain unregulated for the time being.
As well as enabling heat network operators to purchase gas at the capped domestic tariff rates, Heat Trust has called on the government to ensure heat network operators and consumers are able to access any government support aimed at helping struggling families.
It additionally urged the government bring forward plans to regulate the heat network market via Ofgem, which were confirmed in December last year, and requested rule changes to make it easier for landlords to buy gas more than 12 months in advance, further protecting consumers from market volatility.
Stephen Knight, director of Heat Trust, said: “The government is fully committed to making heat networks a key part of its energy policy and must not leave families living on these schemes behind.
“Heat networks have the potential to offer low-cost, low-carbon heat, but without intervention hundreds of thousands of families are facing horrendous and unaffordable heating bills this winter.”
A spokesperson for the Department for Business, Energy and Industrial Strategy, said any customer worried about bills should contact their supplier to access available support.
They added: “Ofgem’s remit does not currently include regulating heat networks, however the government has set out proposals to regulate the sector, including appointing Ofgem the regulator for heat networks.
“This will ensure heat network customers, especially those in vulnerable circumstances, receive a fair price and reliable supply of heat for their homes as we make the transition to net zero.”
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