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Government Energy Bill Support just got very interesting for housing providers – here’s why.

May 15, 2023

The latest iteration of government energy bill support for people on heat networks – the Energy Bill Discount Scheme (EBDS) – could save customers £hundreds on their energy bills. It could also cost housing providers £hundreds of thousands if not £millions in fines if they don’t act now to meet the deadline.

Before we outline what housing providers need to do to secure the discount savings for customers and avoid fines for themselves a quick recap on how we got here.

The government’s support to tackle the energy cost crisis has been developing over time and this has been even more true for those living in homes on heat networks.

I think we can safely say that it has been a work in progress, with a number of iterations and changes along the way.  This is in part because heat networks are more complex because the market has thousands of suppliers, mostly housing providers, rather a small number that supply gas and electricity.

This complexity is made worse because of the impact of heat network efficiency on the end prices that customers eventually pay.

Not surprisingly schemes that have lower efficiency generate bigger bills for customers. Much bigger bills. And the reality is that many heat networks are at that lower end of efficiency, on average we see around 40% efficiency. This leads directly to customers receiving bigger bills and forcing many into debt and fuel poverty.

But back to the latest version of energy bill support and guidance that was passed into law on 26th April.  Here are the key facts:

  • The EBDS provides a discount on commercial energy prices which should then be reflected in customer energy bills.  This covers usage from 1st April 2023 – 31st March 2024 and replaces the Energy Bill Reduction Scheme (EBRS). 
  • Housing providers will have to notify customers that they have received the benefit on their commercial energy costs and will have pass on the saving in bills.
  • The big change is that housing providers will be required by law to register all of their heat networks within 90 days of the governmental portal opening on 26th April (ie by 25th July).
  • Failure to comply could lead to fines of up to £5000 per heat network.

Not only is the registration timescale and potential fines a big change, but so is the range of data and information that will have to be logged that includes locations of heat networks, gas and electricity supplier and meter details (including MPRN/MPAN) and a Director’s confirmation of eligibility.

Housing providers typically have up to 10% of their portfolio on a heat network, but we have clients with as many as 600 heat networks with the risk of fines running in to the £millions.

The point of this is to help customers and the potential savings from EBDS can be significant  – on a typical scheme this could be over £200[1].

Without registering all schemes with all of the data within the 90-day deadline customers will not receive the reduction in energy bills.

Thankfully the steps that housing providers need to take are straight forward, but will just need planning:

  • Collect the gas and electricity meter information.  Bear in mind there may be more than one meter per site and meter data on contracts is often complete. It is critical that this information is correct to secure the discount and avoid fines.
  • Consider how you are going to resource the upload of the information into the portal. 
  • Get ready to notify your customers again about the new discount.
  • Customers energy bills and tariffs will need to reflect the actual savings at each scheme, and this has to be done at the ‘next bill’.
  • Brief your customer-facing teams internally so they can help field queries that may come in.

The guidance on EBDS and access to the registration portal can be found here. We are already working with many housing providers so that they are able to meet the deadline by putting in place the information and data, tariffs and customers support to secure the discount for customers.

Whatever approach you decide to take start the process as soon as possible – it is going to take time and the time is limited.

[1] The higher-level discount for domestic heat networks will aim to bring commercial gas price down to 7.83p/kWh and whilst prices have come down from some of the spikes seen in last 12 months, they are still higher than for many years and next winter will come with similar if not more pressure on prices. Typical bill on 100 unit scheme at 42% efficiency has bill of £996 compared to EBDS bill £783. This does not include standing charges.