400,000 households unprotected by energy price cap, NHF warns

The households, on communal networks within a building, are not protected by Ofgem’s price cap.

The NHF is calling on the Government to act urgently to ensure people on heat networks receive the same protection as customers on domestic energy supplies (PA) (PA Wire)

Some 400,000 households in England – many of them including vulnerable older people – are not protected by the energy price cap and need urgent help, the National Housing Federation (NHF) has warned.

The households are on communal networks and have their heating supplied through a central boiler that reaches all homes in a building, rather than having an individual boiler in their home. They pay for their heating bills via service charges.

Heat networks usually save residents money as housing associations can secure cheaper prices than individuals on domestic contracts by bulk buying energy.

However they are not regulated by Ofgem, which sets the domestic gas and electricity price cap.

The NHF said a large proportion of people on communal heat networks lived in supported or sheltered housing, a form of social rented home for people on low incomes with support needs.

Some 72% are vulnerable older people over the age of 55.

Without the domestic cap, the price these people will pay for energy will depend on the commercial contract their housing provider negotiates with the energy company.

It is unjust that hundreds of thousands of people, through no fault of their own, are exposed to uncapped heating bills just because of the way they pay for their energy

NHF chief executive Kate Henderson

The NHF said recent contracts were as much as 500% more expensive than the previous year, with bills for low-usage homes projected to rise by as much as £68 a week – £1,130 per year over October’s energy price cap.

The Government confirmed earlier this month that residents on heat networks will now receive the £400 energy rebate, although it is yet to be confirmed how this will be administered.

While many housing associations were actively looking at whether they could cover some of the cost from other funds, rather than pass on the full increases to residents, they were not-for-profit and this would mean cutting back on other services for residents or reducing investment, the NHF said.

It is calling on the Government to act urgently to ensure people on heat networks receive the same protection as customers on domestic energy supplies, either by allowing heat network operators to buy energy at the capped domestic tariff rates and pass on the saving to consumers or by providing additional payments to compensate for prices increases above the cap.

NHF chief executive Kate Henderson said: “It is unjust that hundreds of thousands of people, through no fault of their own, are exposed to uncapped heating bills just because of the way they pay for their energy.

“Worse still, the majority of those affected are vulnerable people on the lowest incomes in this country, who will already be struggling to pay for food and essentials.

“The Government has a duty to act urgently and fairly to protect these people in the same way as the rest of the country. With the price cap coming into force in October, it is essential that the Government acts now and negotiates with energy companies to ensure every resident is protected from rising energy bills.”