Heat Network (Metering and Billing) Regulations 2014 – Fines are Imminent
Gamechanging new legal duties
Residents of apartment blocks and regulators both demand greater energy efficiency and accountability. These expectations led to the introduction of the Heat Network Regulations in December 2014. Under this law, Landlords and Developers that provide heat to residents and lessees through a district heating system are legally seen as the heat supplier. As Managing Agents are responsible for ensuring that their clients comply with relevant legislation, they will need to undertake the statutory notification on behalf of their clients.
The law reflects developments in heat supply. Whereas electricity is delivered in its final usable form and is tightly monitored, heat has typically been delivered as gas or oil supply and converted by boiler plant and HVAC systems into heat, chill and hot water. District heating changes this. Heat is supplied in its final form, either to the building itself or to the resident in their apartment. But because this is relatively new, it’s been unregulated up until now. This new UK law is a gamechanger and will help to raise standards of accountability for heat networks.
The best Managing Agents and their clients will see beyond the initial administrative, investigative and capital burden to treat this as an opportunity to make buildings more efficient resulting in lower energy bills. After all, the Heat Network Regulations were formulated in response to the EU Energy Efficiency Directive which is driving forward environmental improvements. It’s known as the 20 – 20 – 20 targets which were set for the year 2020:
- 20% reduction on 1990 greenhouse gas emissions
- 20% share of energy consumption from renewables
- 20% improvement in energy efficiency.
Managing Agents shouldn’t be afraid to get help because the new law is full of complexity. Non-compliance is a criminal offence. Failure isn’t an option when there are civil and criminal sanctions which potentially include an unlimited fine, as well as reputation risks.
Are you ready?
Multi-customer building: Building level meters should already be in place for buildings with more than one final customer to measure heat, chill or hot water supplied from a district heat network
Single customer building: For buildings with just one final customer, a viability assessment must have been completed with individual meters installed by the heat supplier to measure the heat, chill or hot water supplied where required from December 2014.
New or renovated building: There is a mandatory requirement for meters to be installed to measure heat, chill or hot water for final customers where district heating is connected to a new building or following a major renovation.
Those supplying and charging final customers for heating or cooling through a network were required to notify the National Measurement Office, part of the Department for Energy and Climate Change, by 31 December 2015. To do this they had to have accurate records of their heating scheme including meters. After December 2015, if bills are based on inaccurate metering information, this is a criminal offence, which may result in conviction and potentially includes an unlimited fine
December 2016 deadline
Individual heat meters are required for each final customer supplied by district or communal heating, except where assessments show that installation is not viable. Where meters aren’t feasible then the next step is to complete viability assessments of Heat Cost Allocators (HCAs) with hot water meters. All individual level assessments and any installations must be completed by the end of December 2016.
Where meters are installed, the heat supplier must ensure that final customer bills and billing information for heating, cooling and hot water is accurate, based on actual consumption and compliant with the rules. Organisations which provide energy efficiency measures must include information such as current energy prices, consumption and contact information in the bill.
Deadline or no deadline, prevarication prevails since this legislation was introduced. Read our update on the situation.
Future risks and rewards
If a heat supplier fails to provide accurate consumption data at a final customer level, then they will be in breach, subject to criminal proceedings and will face a fine if convicted. In contrast, with accurate metering, improved usage information and greater individual control over heating comes the potential to increase efficiency and reduce bills. Going forward the registration and assessment process must be completed at least once every 4 years to ensure heat metering and billing keeps pace with any changes.
Managing Agents, Developers and Landlords can get help to assess the impact of the new Heat Network Regulations, register their scheme and ensure accurate bills for individual residents by contacting Data Energy on 01279 810120.