Q&A - Heat Network Legislation

Heat Network Legislation - 2014. I'd be interested to know if you've issued any guidance on this https://www.gov.uk/heat-networks I'm involved with an RMC which looks after 25 owner-occupied and 5 rented flats in one block with communal heat and hot water charged via the service charge. I'm not sure who is liable under this legislation - the RMC or the Managing Agent? I don't think many people know much about this so any advice you can find out would be useful I think.

ANSWER

Certain criterion and requirements must be met for the Heat Network (Metering and Billing) Regulations 2014 to apply. The Regulations contain obligations upon heat suppliers of communal and district heat networks.

What does this mean? A communal network distributes for example, heat and hot water to leaseholders from a central source in a building. A district network distributes heat and hot water from a central source of production to multiple buildings. From the question, it appears your block is potentially affected by the first of these arrangements. It is also assumed the RMC is responsible under the terms of the leases for providing heat and hot water to the flats and has employed a managing agent to manage this (and presumably other obligations) on its behalf.

Generally, heat and hot water produced from a central source serving only the communal areas does not constitute a communal heat network. If, however, each occupier relies on heat and hot water produced from a central source (as opposed to its own individual boiler) to serve its own flat, the block will certainly be caught.

If a communal network exists, the heat supplier is responsible for ensuring compliance; that is the person who charges and supplies end users for heat and hot water.

Where the managing agent has contracted directly with an energy company and invoices leaseholders for heat and hot water in its own name, the logical conclusion is that the managing agent must be the heat supplier. In this scenario, there are direct supplies and charges flowing from managing agent to leaseholders. If the RMC has contracted with the energy company and the managing agent is simply collecting charges on its behalf, it is considered the RMC is the heat supplier.

The Regulations have only recently been introduced and further guidance shall shortly be released.

Hema Anand, Partner at Bircham Dyson Bell