Energy Price Cap

With a cap on energy bills set to be included in the Conservative manifesto, the energy industry have reacted with scepticism of the proposal, declaring that the move would be more damaging to customers in the long term.

The proposal is said to be different from Ed Miliband’s 2015 election pledge, whereby he intended to freeze bills, instead with Ofwat setting limits that would reflect market conditions, and with the market still having an influence.

Energy’s “Big Six” have alleged that capping bills would almost certainly end competition, with fewer people switching suppliers because it would no longer be seen as necessary.

It is widely agreed that switching energy supplier is key to increasing competition and decreasing energy prices. Last year a record 7.7 million people changed their energy supplier, however 56% of households have still never switched.

Full details of the pledge are not yet known, but it is thought the cap would be on standard variable rates, considered the most extortionate tariffs available. In December 2016, Ofgem reported that roughly 66% of consumers are on standard variable rates, paying an average of £141 more a year than if they were on the cheapest deal.

Just earlier this month, market watchdog Ofwat imposed a price cap for households using pre-payment meters. This was prompted by a report from the Competition and Markets Authority which found that customers are overpaying by approximately £1.4 billion.

Sharing the Cost: Energy Apportionment

More than ever, Landlords and Managing Agents are monitoring energy usage of buildings with the desire to save money through increased efficiency. However, simply monitoring consumption cannot provide the whole picture, and the ability to apportion energy is required to ensure fair and accurate tenant billing.

The Heat Network (Metering and Billing) Regulations 2014 confirmed the requirement for an accurate billing process with complete visibility of individual energy usage. Landlords of multi-customer developments, where heat, chill or hot water is supplied through a Heat Network, are required to provide detailed information about the network to tenants. This allows residents to be completely mindful of their usage, creating an incentive to reduce consumption where possible.

For energy apportionment to be implemented successfully, billing solutions are required. At Data Energy, our unique Billing Process offers a range of metering solutions, enabling automatic tenant billing based on individual apportioned energy calculations, as well as bill validation and consumption analysis.

Energy apportionment has proven to be extremely effective in promoting tenant accountability for energy use and one of the best solutions towards achieving greater energy efficiency. Apportionment is not only limited to Heat Networks, but regularly undertaken when an electricity supply needs to be divided between a number of tenants. We can help you with this recharge process.

Why not let us review you arrangements for recharging tenants? This could be for electricity, heat, water or gas, just contact one of our dedicated Energy Managers today for more information.

The Big Splash – Update

As you are aware, on the 1st of April the world’s largest competitive water market opened in England, with around 1.2 million businesses, charities and public sector organisations now eligible to switch retailer.

Over 5 years since Defra first proposed non-household retail competition in England in a white paper, eligible customers are now able to choose from over 20 licensed companies to provide an improved service including billing, metering, account management and efficiency advice.

The desired effect of the open market will see customers saving money and water through lower bills and increased water efficiency. Since the water market opened in Scotland, almost 40% of the market has switched over the last 3 years, with the Scottish Government making savings of approximately £40 million.

Concluding the first week of the newly competitive water market, Market Operator Services Ltd (MOSL) have revealed that thousands have already engaged with the market and nearly 9,000 premises have switched retailer.

Cathryn Ross, Ofwat’s Chief Executive said:

“This is a really encouraging start – less than a week in and already we are seeing thousands of customers diving into the new water market. From multi-nationals to micro-businesses – customers are finding the deals that are right for them and they have the confidence to enter the market knowing there is a strong oversight and effective protections in place.”

London RESI Development – 23 March 2017

London RESI Development is celebrating its 10th year as the leading conference for the London Residential Development Market, and Data Energy are excited to be exhibiting.

London RESI Development is being held on the 23 March 2017 at the ETC Venues, St Pauls. The conference promises to be the best to date, attracting hundreds of investors and leading organisations within the sector; combining exceptional networking opportunities and distinctive market analysis.

The conference agenda will bring delegates up to date with major issues within the sector and offer a look into the future of the market, especially considering changes to Senior Government and the new Mayor of London.

The event will examine new legislations, updates in the market and areas of performance through case studies and panel discussions with leading experts within the London Residential Development Market.

We hope you pay us a visit at our exhibition stand, where our Energy Gamechangers will be happy to assist with any questions you may have about our services and products. We look forward to seeing you there!

The Big Splash – Are you ready?

From 3 April 2017 the non-domestic water market will open to competition, but with just over a month to go, are customers aware that they will have the opportunity to switch supplier with the opportunity to make considerable savings?

Research by Ofwat suggests that just one third of customers are aware of these changes, with two thirds still oblivious to the fact they will be able to switch water supplier from the 3rd of April. In fact, customers may only learn about these changes once they receive a new bill and wonder where it has come from.

The most drastic change in the water industry since privatisation, this development will allow for either negotiation with your existing supplier or the opportunity to select a new supplier altogether.

Small and medium sized businesses will be able to look at who supplies them and decide whether the current agreement best suits their requirements. The smaller user, looking at below 5 mega litres (that’s 5 million cubic litres) of use a year will be able to benefit from:

  • Wider choice of tariffs
  • Better standard of service
  • Tailored service offerings
  • Advice on saving water
  • Lower prices

Data Energy will be able to help Landlords and Managing Agents make their residents money go further as the ‘closed’ water industry opens up to competition. We will be on hand to help you with specialist advice and support looking to save you time and money.

For more information and advise please contact us on 01279 810 120.

Ecobuild – 7–9 March 2017

Data Energy’s second exhibition for 2017 will be Ecobuild, held at the London ExCeL Centre from the 7 to the 9 of March 2017.

Ecobuild is the biggest event for professionals in construction, energy and design within the build environment discussing and inspiring solutions towards building better communities.

Attracting senior decision makers and leading minds from within the industry, Ecobuild will explore sustainability, innovation and growth as a priority for associations to make better business choices.

This year, the conference theme will be ‘Regeneration’, focussing on the requirements for success and how to create maintainable communities for healthier, happier people.

Data Energy will be showcasing a wide range of services and products. Come for a chat with our Energy Gamechangers and make sure you don’t miss out on our prize winning game: ‘Beat the Deadline!’

LEASEHOLD 2017 – 1st March 2017

Data Energy are excited to announce that we will be exhibiting at the LEASEHOLD 2017 event; a brand new conference for the Leasehold sector.

LEASEHOLD 2017 is being held at the ETC Venues, St Pauls on the 1st March, bringing together professionals of law, validation and management to debate the upcoming changes facing the leaseholder sector.

The event promises to maximise discussion and to debate the challenges facing specialists focussed on leasehold issues through roundtable debates, panel discussions and networking opportunities.

LEASEHOLD 2017 will be attended by key speakers and leading minds within the UK industry driving the necessary reform of leasehold law within the sector; a fantastic opportunity to keep up to speed with crucial advances impacting Managing Agents, Housing Associations, Surveyors, Estate Agents and Valuers.

We hope that you will come and see us at our exhibition stand, where our Energy Gamechangers will be showcasing our services and products.

RESI Conference – 12-14 September 2016

resi

RESI Conference is celebrating its 10th year as the longest running and largest conference of its kind, making it the leading network event for the residential sector, and Data Energy are extremely excited to be exhibiting. 

The RESI Conference is being held at Celtic Manor, Wales on the 12th to the 14th September 2016. The conference promises to be the best to date, with a brilliant variety of speakers, networking partners, fantastic networking opportunities and around 1,000 delegates.

RESI will have a forward focus, charting the blueprint of the next ten years, facilitating cutting edge debate, exploring opportunities and challenging the status quo.

With top speakers and leading minds from industry and government, RESI will be a place to learn, engage and connect with the industry’s visionaries and future thinkers, such as leading developers, investors, landlords, consultancies and public sector organisations.

We hope that you will pop in to see us at Data Energy’s exhibition stand, which will be situated at plot E3, just right to the entrance. Come for a chat with our Energy Gamechangers and make sure you don’t miss out on our prize winning game “Beat the Deadline”.

Data Energy Stand v7

Residential leases v Heat Network Regulations – What to do

cs_grosvenor_waterside

Everyone wants to obey the law. But what can you do if the residential leases you work to, are at odds with the Heat Network Regulations?

Landlords and Managing Agents will recharge the cost incurred for the heat and hot water they supply to residents from a communal or district heating system. Traditionally, costs are apportioned according to the method stated in the residential lease. Usually, a percentage of the total service charge is levied for each flat, typically based on the floor area of the resident’s property or number of bedrooms and covering all communal and shared services. Until now residents haven’t normally been charged for the supply of heat and hot water, based on actual consumption simply because this information has not been available at individual flat level. But with the advent of the Heat Network Regulations, this needs to change.

Heat billing: what’s changed?

On 31 December 2016, regulation 4(4) of The Heat Network Metering and Billing Regulations 2014 (Heat Regulations) comes into force. This regulation requires that ‘heat suppliers’ install meters to measure the
consumption of heating, cooling and hot water by each final customer – except where it’s not cost effective or technically feasible.

In addition, regulation 9(1) requires heat suppliers to charge for the consumption of such heating, cooling and hot water by a final customer based upon actual consumption. The Heat Regulations apply to ‘heat suppliers’, who are people that supply and charge for the supply of heating, cooling or hot water to a final customer through a ‘communal heating’ or ‘district heat network’ (as defined in the Heat Regulations). The Heat Regulations will apply to Landlords and Managing Agents that meet these criteria.

deadlineReady for 31st December deadline?

From 31 December 2016, Landlords and Managing Agents with properties affected will be required to:

  • Have meters in place to measure actual consumption by the final customer.
  • Bill based on actual consumption.

What’s at stake?

Compliance with the regulations is not optional. Regardless of what the terms of the lease state about apportioning heat supplies, the Heat Regulations must be adhered to. Any Landlord or Managing Agent that fails to comply with the Heat Regulations, where required to do so, will be liable to both civil and criminal sanctions – which potentially includes an unlimited fine.

Lease v Regulations: what’s the problem?

Compliance with the Heat Regulations will pose a difficulty for Landlords and Managing Agents where leases:

  • Provide for heat to be charged for, by any method other than by reference to actual consumption.
  • Do not make express provision within them for amendments to be made in the event of changes in law.

Where the lease doesn’t contain the ‘Change of Law’ provision, if the Managing Agent charges for heat based upon actual consumption, as required by the Heat Regulations, it may find itself in breach of the lease. The consequences of this will depend on the terms of each lease, but could foreseeably result in a tenant refusing to pay the heat charges. Needless to say, only those tenants that are worse off under the metered approach are likely to dispute the change.

What should I do?

How should Landlords and Managing Agents best manage the situation where the charging provisions in the lease contradict those contained in the Heat Regulations? Our research suggests that this approach will help to
keep all parties on the right side of the legislation and the regulations.

Lease has no ‘Change of law Provision’

Write to tenants explaining that the Heat Regulations require charges based on actual consumption from 31
December 2016, and proposing that the lease is amended to reflect this change in law. We would expect most tenants to accept that this change in the law necessitates a change to the lease. Where a dispute is raised by a tenant, the provisions of that individual lease should be carefully considered to determine the implications. Unfortunately, there is no generic position that can be applied, but it may be possible to argue that it was always implicit in the lease that the charges should first and foremost be calculated in accordance with law.

Lease contains the ‘Change of law Provision’

The Landlord or Managing Agent should consider invoking these provisions as soon as possible to ensure that the terms of the lease can be made consistent with the Heat Regulations with effect from 31 December 2016.
Please do bear in mind that this is summary of the general position. Since the position will vary from lease to lease, I’d always recommend that Landlords and Managing Agents seek legal advice in relation to their individual leases.

Take action now or face the penalties

Heat Network (Metering and Billing) Regulations (Amended) 2015

New Heat Regulations are now on the statute books. Yet many of those whom the law affects, have yet to act, risking prosecution.

Purpose of Heat Regulations

The Heat Regulations implement the European Commission’s Energy Efficiency Directive The goal is to make end users aware of how much heat they consume and encourage them to reduce their heating costs. This contributes to the EU target to reduce energy consumption by 20% by 2020.

3 main deadlines

18 December 2014: Heat meters must be installed at building level when a District Heat Network applies.

31 December 2015: The National Measurement and Regulation Office must be notified of the presence of a Communal or District Heat Network.

31 December 2016: Heat meters must be installed for final customers and bills must be based on actual consumption. Otherwise a feasibility study must be completed to confirm it’s not cost-effective or not technically possible to install meters, in line with strict rules.

Communal or District Heat Network?

Communal Heating: where heat is supplied from a centralised heat generation source and distributed around a single building with more than one final customer take off point.

District Heat Network: where more than one building is supplied from a single centralised heat generation source with final customer take off points.

Penalties for non-compliance

A Landlord/Managing Agent that fails to comply with the Heat Regulations where required to do so will be liable to both civil and criminal sanctions, which potentially includes an unlimited fine.

Who is affected?

The Heat Regulations are all about the onward supply of heat to others. Broadly speaking, if you are paying for the fuel supplied to a building and recovering those costs by recharging more than one final customer for the heat supplied to their premises (typically a leased area) and this isn’t a flat rate, then it’s highly likely you are running a Heat Network and you are a Heat Network Operator. In this case you have obligations under the law.

A typical residential mansion block with a centralised boiler room, where heat and hot water is distributed around the building for the tenants to use, almost certainly constitutes a Heat network. In this instance the Landlord is the Heat Network Operator, and the Managing Agent acts on their behalf.

Billing and reporting by December 2016

The Heat Regulations require the Heat Network Operator to ensure that bills and billing to the final customer must:

  1. Be accurate
  2. Be based on actual consumption
  3. Comply with the Heat Regulations minimum billing requirements:
  • Billing at least annually based on an actual read
  • Meet requirements for billing format
  • State the energy price charged
  • Report on consumption
  • Include comparisons to historical consumption
  • Provide details of energy efficiency organisations
  • Satisfy further requirements including showing billing costs

 

Data Energy offers practical expertise as a Heat Network Operator. Ask for our help – soon!

 

 

New development?

Create the ideal heat network!

Heat Networks (HN) are complex to design and run. They come with a raft of legal administrative duties. Especially since the advent of the Heat Network (Metering and Billing) Regulations. Managing Agents handle this responsibility on behalf of property owners. With existing buildings, HN inevitably have legacy issues, not least where the terms of the typical lease contradict the new Heat Regulations. New developments provide a superb opportunity to create the ideal HN set-up from the outset. One that satisfies all stakeholders and ensures a better experience for lessees/residents and greater value for developers and owners. Data Energy offers support throughout the HN life cycle, in order to achieve the ideal HN.

The perfect heat and hot water system

Data Energy, has practical experience as Heat Network Operators across many schemes. Our expertise at critical points in the HN life cycle will help you to avoid many pitfalls and enjoy an effective HN.

The ideal HN boasts these features:

  • Correct sizing of the plant and distribution system to consistently meet demand.
  • High energy efficiency levels so heat isn’t lost resulting in lower unit rate costs.
  • Correct maintenance with plant run at optimum manufacturer/designer levels.
  • Correct handover documentation from the Developer to the Managing Agent.
  • Managing and maintaining a billing platform that includes metering.
  • Keeping the administration costs of heat billing to a minimum.
  • Charging for the heat supplied and avoiding credit risk.
  • Delivering value and complete reliability for the end user.

 

Heat network life cycle

For new apartment-block developments, get operational guidance from Data Energy. Seemingly subtle improvements to the heat network solution can deliver significant returns. Here’s how we work alongside key stakeholders to deliver a heat network that’s reliable, environmentally friendly and cost-effective for the long term.

Stage 1: Heat network requirement defined

The parameters for the heat and hot water solution are set out by the developer.

Stage 2: System designed to deliver the solution

Our input: design review; input to head lease and supply contracts

Data Energy reviews the proposed design and selection of equipment, with insights as to what works in practice. Importantly, we contribute to the lease drafting process to help ensure the legalities dovetail correctly, with enforceability clearly defined. Our input to legal contracts extends to energy services agreements and heat supply agreements.

Stage 3: Construction and commissioning completed  

Main contractors, builders and sub-contractors create the development in line with plans.

Stage 4: Apartments marketed and sold

Our input: pre-handover inspections; input on legalities

Complex documents that define landlord’s and lessees’ obligations are drawn up.

Pre-handover inspections are completed by Data Energy as the handover to the Managing Agent nears. We work with the developer, builder and subcontractors to review the solution. We review the commissioning and ensure the handover gives the Managing Agent the confidence that they can deliver their responsibilities under the Heat Regulations. We also assist in defining the lease for potential buyers to help ensure terms are enforceable and fair.

Stage 5: Handover to the Managing Agent

Our input: contribute at meeting; metering inspections

At this stage the maintenance and operation of the Heat Network, is handed over to the Managing Agent to meet the landlord’s obligations. Data Energy attends the handover to ensure everything is clear and as expected. Metering and metering networks inspections are completed by Data Energy to ensure the system has been correctly commissioned.

Stage 6: Occupation and ongoing service

Our input: billing & recovery; reporting; tariff setting

From occupation, the heat network must meet the expectations of the owners, lessees or residents. Data Energy provides vital support with billing and recovery, reporting and tariff setting. We use metering information, to raises and issues bills, recovering payments where necessary, from those responsible for settlement. Data Energy also reports on the energy efficiency of the heat networks and identifies any improvements. To set tariffs we assess the fixed and variable costs of the heat network and define the tariff for recharging, so costs can be fully recovered and billing meets legal requirements.