Priorities for heat networks consumer protections: Debt and affordability discussion paper
Priorities for heat networks consumer protections: Debt and affordability discussion paper 1.95 MB
New heat network regulations coming into force from January 2026 are a major step toward ensuring fair treatment for all consumers. With heat networks operating as natural monopolies, robust regulation is critical. Making sure heat network consumers finally get the protections they deserve is our top priority.
In our first month as the new statutory advocate for heat network consumers, our frontline services have been advising more clients on heat networks. Analysing these cases, along with those from recent years, we’ve seen the serious harms some heat network consumers experience.
Steep price increases since the energy crisis, shock bills and poor communication have left some people struggling to afford their bills. Some providers' aggressive approaches to recovering debt have led to consumers being cut off from an essential-to-life service and others being at risk of losing their home.
The Government recently consulted on proposals that begin to tackle these issues, but these need to be strengthened in some key areas. DESNZ and Ofgem should take bold decisions as they continue to develop the new protections that will be introduced next year.
Improve standards in billing for unmetered consumers. Clear, transparent and accurate bills are essential for consumers. The large proportion of heat network consumers living in unmetered properties could be waiting years to see improvements without stronger minimum standards. Minimum standards should include a requirement to provide bills at least annually and to provide a range of payment methods.
Strengthen year-round disconnection protections. We want to make sure disconnections for debt are extremely rare. Cutting off supply can have very serious consequences for people’s safety. People in vulnerable circumstances should be protected from disconnection all year round - not just in winter. Thousands of organisations are involved in running heat networks, so DESNZ and Ofgem need to set strict standards in this critical area. Ofgem should closely monitor disconnection and the forced installation of prepayment meters, which can lead to disconnection for people who can’t afford to keep their meters topped up.
Prevent eviction for heating debt. Heat network consumers risk falling through protection gaps unless action is taken now. Government departments should work together to unbundle heat from rent and service charges. These bundled charges can lead to major harms like shock bills, eviction threats and mortgage forfeiture, which must be addressed for new consumer protections to be credible. As a first step, we need clarity on what is needed to achieve unbundling, and a timeline for doing so.
Limit back-billing to 12 months for all consumers. Current proposals mean consumers who pay for heating as part of their housing costs could suffer from a second class standard on back-billing, until these charges are separated. Allowing their providers a longer 18 month time-limit for back-billing would expose these consumers to greater risk of debt. We want to avoid a 2-tier system that leaves some consumers worse off and creates confusion among suppliers and consumers.
These measures are priorities for strengthening the initial consumer protections due to begin in January 2026. But they will only start to address problems of affordability, unreliability and failures of accountability which have damaged consumer trust in the heat networks sector. In the longer term, to secure better outcomes for consumers, DESNZ and Ofgem need to make appropriate decisions on price protections and technical standards.