Maximum recharge price per kWh from landlords supply

Taiko

Hi all,

Trying to look into an issue on a gas supply for a relative of mine, who has moved into a supported living scheme. The block is of about 70 flats, and they have one central boiler room circulating heat and hot water around the building. Each flat is self contained.

The freeholder, a housing association, are sending bills out with a gas unit price of around 8p per kWh and when this was challenged it showed they were paying British Gas 2p per kWh. Apparently the recharge unit price is set based on heat loss as it is sent around the building.

My question therefore is if the recharge price of 8p is allowable? I had a look at Ofgem guidance, and it seems to indicate that you can only recharge what you pay for that, so my belief is the flat should be charged 2p, and any heat loss from running the system should get recovered in a service charge for the property. Does that sound about right? I can't find anything on OFGEM to say they can include the heat loss, but all the guidance seems to be about 10 years old.

Thanks,

molerat

Surely they are charging for "heat" and not "gas", as in any communal heating system, but basing that on the amount of gas used. A complex one but I doubt they are in breach of the regulations as they are not charging directly for individual consumption.

matelodave

Have they got a "heat meter" or are they being charged a fixed amount? Have they got a gas meter?

As Molerat says, they appear to be selling heat rather than gas and they can charge what they like for heat as there will be additional costs over above that of the input gas - there'll be the efficiency, distribution, maintenace and running of the system thats included.

Actually 8p/kwh for heat isn't bad - it's about the same as off peak leccy (and you've got it 24/7 rather than just overnight) and probably not far off what it actually costs the average householder by the time, efficiency and other factors like boiler maintenance etc have been taken into account.

antrobus

Taiko wrote: »

..My question therefore is if the recharge price of 8p is allowable? I had a look at Ofgem guidance, and it seems to indicate that you can only recharge what you pay for that, so my belief is the flat should be charged 2p, and any heat loss from running the system should get recovered in a service charge for the property. Does that sound about right?,...

No, I think that communal heating is covered by the The Heat Network (Metering and Billing) Regulations 2014 and 2015

https://www.gov.uk/guidance/heat-networks

The regulations can be found here;
http://www.legislation.gov.uk/uksi/2014/3120/contents/made
http://www.legislation.gov.uk/uksi/2015/855/contents/made

It seems that all this is overseen by the National Measurement and Regulation Office. They have a FAQ;
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/489373/Heat_Network_FAQs._1.1.pdf

Taiko

Thanks for that, and yes it would be heat. Shall have a look through those regs.

I think the main issue will be no chance to choose supplier, but also the hot water charges. Those are currently just under £15 per cubic metre (not a typo!)

System

Taiko wrote: »

Thanks for that, and yes it would be heat. Shall have a look through those regs.

I think the main issue will be no chance to choose supplier, but also the hot water charges. Those are currently just under £15 per cubic metre (not a typo!)

You are looking at this in a very simplistic way. I assume that water includes sewerage and drainage which are chargeable items. Typically,......

The volume charge (per cubic metre) for a Household supply is as follows and applies to metered customers only: Water = £1.9484 per 1m3 (£0.0019484 per litre) Sewerage including Surface Water Drainage = £3.3954 per 1m3. Sewerage excluding Surface Water Drainage = £2.9956 per 1m3.

When we moved MiL into a aupported scheme some years ago, all the above charges were made very clear to us before the agreement was signed.