Residents of housing associations connected to heat networks will not be entitled to compensation, say Ofgem
The housing association resident compensation claims in question would be linked to unplanned interruptions to their heating supply.
In a consultation, Ofgem stated they did not believe that housing associations should be liable to pay compensation to unplanned heat network interruptions.
Ofgem’s proposals outline why housing association resident compensation would be appropriate
The energy regulator published their compensation guidelines, saying that for unplanned interruptions to heating supply, residential customers should receive £45 per day, up to the cap of £720.
It also outlines that heat network providers should recompense customers for multiple interruptions in a single year, at a proposed £80 for customers by four 12-hour supply interruptions in a year.
The plans were put forward in the proposals for regulating heat network operators late last year, in a joint consultation with the Department for Energy Security and Net Zero (DESNZ).
However, Ofgem have not stated that residents of housing associations should be exempt from the compensation, on account of housing associations acting as not-for-profit organisations, investing their money to provide affordable homes and invest in local communities.
Housing associations will need to submit improvement plans instead
If a housing association’s heat network does not meet overall performance standards, they will need to submit an improvement plan to Ofgem.
These would be tailor-made and operate on a case-by-case basis for the standards that are not being met. The plan will need details of how the association will address the issues and the timeframe for fixing it.
Tom Naughton, COO at heat network consultancy FairHeat, said: “We support the introduction of new consumer protection regulations for customers connected to heat networks.
“In addition to the new customer protections coming forward FairHeat is helping the government to introduce the new Heat Network Technical Assurance Scheme (HNTAS) to ensure heat networks meet a minimum level of performance and reliability.
“Not-for-profit organisations (except those deemed local authorities) are said to be exempt from having to pay compensation, it is instead proposed they be required to meet overall performance standards and to submit an improvement plan to meet them.
“FairHeat has proved the value in improving standards of performance through the optimisation of several existing heat networks for social housing providers where we have cut gas usage by up to 60%, saving residents thousands of pounds and securing government funding to help pay for the works.
“Enabling not-for-profit landlords to concentrate efforts on improving heat networks rather than paying compensation will help more customers and also have a bigger impact on the lives of those customers.
“It’s crucial social housing providers and private developers understand the new regulations coming into effect and know that government funding is available for providers to improve the performance of their heat networks.”
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