Heat Network Regulations 2014

Heat Network (Metering and Billing) Regulations 2014 – Fines are Imminent

These Regulations were introduced in December 2014 to provide regulation to a previously unregulated market place. Heat Suppliers (this could encompass Developers, Landlords and Managing Agents depending on the arrangements in place) have the responsibility to notify the Department for Energy and Climate Change (DECC) about schemes

The scope of the regulations is extensive and we only provide a brief explanation on selected elements of the Regulations, focussing on metering and billing requirements. This we feel is particularly relevant as there are a considerable number of schemes where the metering technology is not delivering the expectations of the consumer and the need to receive regular and accurate charges for their energy usage.

The regulations require a meter to be installed to measure the heat, chill or hot water supplied from a district heat network to a building occupied by more than one final customer. Further, from 31 December 2016, separate metering is required for each final customer (unless it is not cost effective and technically feasible to do so – which need to be determined in accordance with schedule 1 of the regulations).

If a building is only occupied by one final customer then a heat supplier must install a meter to measure the heat, chill or hot water supplied, unless it is not cost effective and technically feasible to do so (again, this will need to be determined in accordance with schedule 1 of the regulations).

An exception to the above position is in the case of a newly constructed building supplied by a district heat network or where a building supplied by a district heat network undergoes “major renovation” which relate to the heating, cooling, ventilating, hot water or lighting services of that building. In those circumstances, the installation of meters to measure each final customer’s consumption of heat, chill and hot water is mandatory. A “major renovation” is regarded as where the total renovation cost of the “building envelope” (the integrated parts of the building which separate the interior and exterior) is more than 25% of the value of the building (excluding the value of the land).

If a heat supplier determines that the installation of meters is not cost effective and technically feasible then alternative measures need to be considered – such as the installation of heat cost allocators and thermostatic radiator valves. Where there is no meter, the cost effectiveness/feasibility must be re-assessed every 4 years.

Where meters are installed, the heat supplier must ensure that bills and billing information for the consumption of heating, cooling and hot water by the final customer are (1) accurate, (2) based on actual consumption and (3) compliant with the principles set out in Schedule 2 of the regulations. Schedule 2 requires information such as current energy prices, consumption information and contact information for organisations which provide information on energy efficiency measures to be provided with the bill.

Clearly, if bills are being produced without accurate metering information then they will not be accurate, based on accurate consumption nor compliant with the principles set out in schedule 2. If this happens after 30 April 2015, this will be a criminal offence, which may result in a fine upon conviction of up to £5,000.

The result being that, where a development is failing to provide accurate consumption data at a consumer level, then the Heat Supplier will be in breach, subject to criminal proceedings and a fine if convicted.

If you would like more information on this then please contact us on 01279 810100.

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