EON HIU Tariff Query

markimark1984 · 8 January 2016 at 1:35PM

Hi all,

I have a question which I can't find the answer to online.

I moved into a new build apartment back on 28th August last year. I bought the property.

The heating and hot water for the whole building is supplier by EON using a Heat Interface Unit system.

Part of the contract when purchasing the property was that EON would be the exclusive suppliers of heat and hot water, however, electricity I could have whichever supplier I wanted. This is because EON were the ones who installed the HIU system in the building.

My problem is the tariff which they are supplying. The unit price is 6.68p per kwh and the service charge (or I suppose also known as the standing charge) is a huge £332.74 per year or £0.91 per day. All plus VAT.

When I have lived with gas and electricity in previous properties I have been used to a standing charge of approx £0.14 er day which is quite affordable.

I have been waiting for the sign up forms from EON since I moved in and I still haven't had them yet, in fact the information I have provided you is from neighbours in the block as they have all been put on the same tariff. I needed to know the information so I could start to save for the 4 months which I haven't had a bill for yet!

The concerning part is the standing charge. If I was to not use any heating or hot water in a 31 day month my bill would still be £28.26 before VAT. To me this doesn't seem to be affordable or even fair!

The other concerning thing is that we are not able to switch suppliers! We are stuck with EON charging this massive charge to us and we can't go to the market to get a competitive price, so surely it should be even better than market prices?

As it stands I have used 300 units of heating and hot water since moving in which comes to £20.04. I am a careful user of the heating etc as I don't want to waste energy. I'd rather put a jumper on if it's chilly rather than turn up the thermostat - I like to spend my money on things other than heating bills! It's the way I have always lived.

So My question is, is it fair we're being charged all this service charge? Is it normal? Do i have to just accept it or are EON trying to pull a fast one?

It just seems a lot of money for a new build property which is super insulated and efficient but still costs as much as a top floor flat in an old converted house to heat!

I'm looking forward to your responses and I really hope you can help, it's appreciated!

Mark

E.ON_Company_Representative:_Helena · 8 January 2016 at 2:46PM

Good afternoon markimark1984,

I've got to be honest with you, Malc and I deal with all sorts of questions and issues on the forum and we always do everything we can to help.

However,

this is a HEAT account and means we have no access to the customers' accounts, can't see details of products and prices and all of the information we have is on the website, we're not allowed to post links but if you type HEAT in the search box it'll pop up.

We have a specific area of the business that deal exclusively with HEAT accounts as these do work differently to normal residential accounts and I would have to suggest you contact this department, details on the website.

I'm really sorry I can't help you with this

I hope everything is resolved to your satisfaction.

Helena

markimark1984 · 8 January 2016 at 2:49PM

Hi thanks for this.

I'd still be interested in hearing from other people to see if this £0.91 per day charge is excessive or not. It seems incredibly so to me.

dav8t · 13 January 2017 at 11:44AM

Hi Mark,

District heating has become a hugely controversial topic nationally as more and more new developments are having these set up as part of project finance initiatives between developers and energy companies such as Eon, in many cases with the benefit of local government grant funding. Thus there is an emerging population of home owners like you (and me) that move into properties where an agreement is already in place and, assuming the heat supply arrangement wasn't a deal breaker at the time of purchase, you move in and are suddenly surprised by the very high cost of the standing charges you owe for a seemingly basic service.

District heating works really well in apartment blocks in other countries e.g. in Germany and is an environmentally friendly way of supplying heat, at very low cost to home owners. In the UK the government have taken the approach that they do not want to place additional regulation-related costs on companies willing to invest so the area is currently totally unregulated (falls outside the remit of Ofgem). The result is that developers and energy companies can charge what they like (within reason, the limiting factors being that home owners are free to have systems removed and replaced with their own boilers or if charges were extortionate they may choose not to buy a property from a developer). The current industry standard is that they are pitching prices slightly below what it would cost for you to hypothetically run a boiler in your own flat and service it, and then peg this to annual inflationary price increases. Typically the supply agreements run for 20-25 years (which is around about the time that many boilers would need replacing).

Your service charges are similar to what many people (myself included, and neighbours in our apartment block) pay Eon.

Word of warning - Eon Heat is run as a separate entity to Eon's Electricity and Gas supply company. I am unaware of the company structure or if this is a subcontracted arrangement but the company itself has rather chaotic internal systems for managing accounts. Forums like this are full of issues relating to incorrect billing, post-hoc price increases, backdating of increases in tariff, poor or absent meter reading etc.

My advice would be to get your heat agreement and pricing arrangement signed and returned by Eon, file it away and keep a close eye on your usage.

District heating suppliers have been encouraged into a self-regulation forum called the Heat Trust, encouraged by consumer group Which. They have set out rules for themselves to abide by which mirror those of Ofgem and have a complaints procedure which includes escalation to an Ofgem appointed complaints officer (but not directly done by Ofgem).

markimark1984 · 17 January 2017 at 4:55PM

Hey there @dav8t

Thanks very much for your very detailed reply. After quite a lot of digging around and phone calls I can completely agree with everything you have said.

The tariff everyone in the apartment block was put on by default was a tariff made for a family. I explained that pretty much all of the residents in the block were either people living on their own or couples, so why on earth is a "Family" tariff the correct one to start people off on. They then explained that there was another tariff, a "low usage" tariff.

I pretty much lost it at the time I found out about the other tariff and demanded that they change my tariff and have my bill back dated - to my surprise, they did this with no problem.

I am now paying 14.73p/unit instead of 6.68p/unit and 26.392p/day instead of 91p/day - As a low user this is far more attractive and has had a massive impact on my bills.

The bit where I am pretty convinced that EON are breaking the rules is that 1) they automatically put you on the "family" tariff, 2) they do not give you tariff options on paperwork when you first move in to the property (for an informed decision) and 3) they do not tell you about the low usage tariff over the phone unless you ask them if they have one. They are not being transparent at all.

I am positive this will come back to bite them at some point.

razord · 17 January 2017 at 6:08PM

Oh, don't get me started on E.On Heat.

They're simply incompetent, and if you raise a complaint, you basically just get batted around their customer services department for months, then they'll close the complaint without resolution, and because they're not covered by the ombudsman, you can't do anything about it.

Plus, they recently got rid of the dual fuel discount because of "Ofgem rules" - i asked them to clarify which rules this was, and they couldn't.

dav8t · 20 January 2017 at 10:03PM

We pay 43p/day and about 7p/unit. Though I have been told that there are 5 different tariffs in our building (even though only one single tariff is described in the 'Heat Agreement')

As a follow up, I've been told that the Heat Agreement is a one way street. They refused outright to sign the agreement and return it to me and welcomed my complaint, which as you've pointed out is not within the jurisdiction of the energy ombudsman, and will be dealt with internally only.

As a matter of procedure at Eon's Heat Team, the Heat Agreement is only signed by one party, the customer, is scanned in, never signed by anyone at Eon in the "Eon Representative" space on Page 1 and not returned. The inflationary price indexing formulae in Schedule 1 are procedurally ignored. It was explained to me on the phone today that the reason for this is that Eon Heat wants to have the opportunity to increase prices in the event of an unexpected increase of costs to them.

She tried to reassure me by saying that any future price rises would be tolerable because otherwise people would choose not to buy or might have to sell their flats, and Eon might find it difficult to strike up new deals with a developer if it became a political issue. This was equated to 'competition' but I wouldn't exactly agree!

Recently some of our neighbours received large bills from Eon in the order of £600-£1000 due to backdating of price increases to the service charge which arose from a dispute between the management company and Eon about what the appropriate rate was. Eon felt that a share of the service charge should have been paid by the management company in accordance with the terms struck between the developer and Eon. When neither party agreed, Eon started sending out large bills and collected the charges by direct debit. It was eventually resolved and most people have been refunded but it was all very ugly.

What to say ... I'm honestly speechless!

razord · 20 January 2017 at 11:01PM

Here in Bath, we've had a fault with our smart meters for 2 years now, and they keep saying it'll be fixed soon - it hasn't been.

They email every month with a manual email asking for a meter reading, and their website doesn't have a nice way of submitting them - you have to fill out a contact form. It's a complete nightmare.

It's kinda BS that i'm paying a maintenance fee that covers me when things go wrong - but clearly not, if i've been waiting 2 years for a fix. (also bad enough that I rent, and normally the landlord would be responsible for this, but because it's part of the usage bill, it's on me!)

dav8t · 6 February 2017 at 3:07PM

There was an Observer article on this from Anna Timma yesterday:

"Energy customers locked into a costly scheme who have no right to switch"

[It won't let me post the actual link]

molerat · 6 February 2017 at 3:49PM

https://www.theguardian.com/money/2017/feb/05/district-heating-fuel-bill-regulation

DistrictHeatcostsmore · 18 March 2017 at 12:45AM

Allegedly there are doubts into the 'remote meter reading' issue and it could be hiding a dark issue - covering up the customer usage! Maybe the media needs to investigate this problem.

Here is a good reason to allegedly distort the district heating meter readings.

District heating can be efficient and it can also be extremely inefficient.

Let's say you want to hide the usage figures especially during a time when customers hardly use heat - known as heat hot water only in the summer.

Now during the winter people use the heat to warm their homes - it's very very difficult to measure someone's usage but let's say they use 20-25kw per day. However the heat provider will suddenly announce the meter readings are not working so what happens they estimate your daily usage to be 8 units a day. Now the spring warmer weather comes along and the heating rads is no longer required. So basically the only heat required is hot water. Now a normal household with 2 adults should use about 3kWh of energy per day however district Heating may need twice that. Now to distort the figure the unaccounted winter usage is stretched into the summer months because of the unfortunate meter reading failure ;-) so customers end up paying for the space heat of the winter into the summer months. Maybe that's fine for some but it does prevent the customer from assessing their daily usage and realise 6kwh a day to heat hot water is too much!

There is a possible chance that the end product of heat is inefficient by as much as 50%. Such can only be identified during the summer period as winter days uses various heat usage.

Many new planning applications require low carbon heat so developers use dh as the answer. The planners never question the efficiency of the end product so customers use twice as much heat and double their carbon footprint!

I've measured a fitted HIU and the heat loss is huge!

Amazing! customers cannot work it out nor can the media.

DH costs twice the price of gas and requires twice as much energy to achieve the same job.

The great Heat robbery of the modern era

Let's see how long it takes for someone to respond to this posting.

EON HIU Tariff Query

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