BEIS update (18 November 2022)
BEIS issued an update on the Alternative Fuel Payment on 18 November 2022, following the Chancellor’s Autumn Statement:
“As heat networks purchase energy through commercial contracts their customers will see reductions in their heat price as a result of the Energy Bill Relief Scheme. They will also receive the Energy Bill Support Scheme payments of £400 and be subject to the domestic Energy Price Guarantee for electricity which was extended yesterday by an extra 12 months from April.
However, it has been decided that heat network consumers in Great Britain will now not receive the Domestic Alternative Fuel Payment which has been designed to support households using fuels such as oil, LPG or coal.
In order to support heat network consumers over the longer term, the Government will bring forward a more appropriate route to deliver bespoke support, including beyond April 2023, to meet our commitments to those on heat networks, and other domestic households with commercial energy contracts. Further details on this support will be published shortly.”
Our original blog (10 November 2022)
The Energy Prices Act came into force on 1st November 2022 and provides the legislative framework to deliver the winter package of energy support in particular:
- EBSS: Energy Bills Support Scheme (£400 to everyone through their electricity bill)
- EBRS: Energy Bill Relief Scheme (cap on wholesale energy prices)
- AFP: Alternative Fuel Payments (additional £100 to all heat network customers)
Full guidance from BEIS is available at https://www.gov.uk/government/publications/pass-through-requirements-for-energy-price-support-provided-to-intermediaries.
The good news is that this package of measures should now mean that heat network customers are getting support that is closer in equivalence to other domestic customers. Some of this will be automatically be paid to customers – for example the EBSS through electricity bills – but some of it requires actions from you as a landlord and/or heat network operator.
The table below summarises our current understanding of the requirements (as of 9th November 2022). It is important that all those managing heat networks come to their own understanding on what this support means for them and their customers and seeks independent legal advice where required.
We’re still waiting for some information (eg how will the EBSS be paid to customers who don’t have an electricity bill, and the details of the Declarations of Operations): these are expected to be introduced through secondary legalisation in the next couple of weeks. The Heat Trust has also provided a useful summary of all the different support available to customers on their website.
|Scheme||Customer Support||How it works||Landlord requirements and obligation||Impact if action not taken|
|EBSS: Energy Bills Support Scheme||£400 in instalments over winter||Paid through electricity bill. Alternative payment method for those without electricity bills TBC||– Best practice is to advise customers of EBSS|
|EBRS: Energy Bill Relief Scheme||Benefit applied to wholesale energy cost that then determines tariffs and service charges||Cap on wholesale energy prices||– Calculate pass-through value to customers|
– Notify customers within 30 days of being notified of wholesale price benefit
– Register with Energy Ombudsman Redress Scheme
|– Consumer can make a complaint to the Energy Ombudsman|
– Any Ombudsman investigation is funded by landlord
– Consumer can recover the pass-through amount as a civil debt
|AFP: Alternative Fuel Payments||£100 one-off payment||Likely to be payment through electricity bill (or alternative as with EBSS)||– Declaration of Operations to OPSS within 30 days of enactment (likely 1st December)||– Customers may not receive the £100. |
– OPSS prioritising enforcement
|Reduced electricity costs for Landlord Supplies||Limited or reduced service charges||Landlords are intermediary and expected to pass on any savings to end users||– Notify customers within 30 days of being notified of wholesale price benefit||– End users entitled to recover as a civil debt|