Citizens Advice has petitioned the Competition and Markets Authority to investigate the district heating sector due a “lack of choice and control” for consumers.
The charity says it has “considerable concern” over the balance of power between suppliers – which face no competition as “unregulated” natural monopolies – and consumers – who risk being overcharged as a result.
“Unlike the gas and electricity sectors, the delivery of heat to homes is not regulated,” Citizens Advice states in a new report.
“People receiving heat in that was do not receive the same protections as those heating homes using individual gas boilers or electricity.”
Heat networks are currently experiencing a “renaissance”, according to the study, with 2,000 already operating in the UK and 150 known to be the pipeline.
Citizens Advice says contacts to its consumer helpline relating to heat suppliers have risen over the last year, but it can only offer limited help due to the absence of sector-specific regulations. It says the problem is likely to become worse as the number of heat networks grows.
The report places a number of problems in the spotlight. They include: the calculation and availability of tariffs, which vary widely from supplier from supplier; the lack of choice over meter type; the length of contracts, which in some instances last for more than two decades; and the inability to disconnect without incurring charges.
The Heat Trust – a voluntary, industry-led scheme – was launched in November 2015 to increase protections for consumers. Citizens Advice says it sees “little-evidence” that heat suppliers will feel compelled to sign up.
With “no indication” that the government plans to introduce statutory regulation in the near future, it has therefore urged the Competition and Markets Authority (CMA) to step in and investigate the situation.
The consumer group also called for the Heat Trust to develop best practice for charging as well as an improved benchmark system so consumers can assess whether they are getting good value for money.
Heat Trust head of scheme Bindi Patel told Utility Week: “We welcome Citizens Advice’s suggestion that Heat Trust could expand its role by further improving billing best practice, and look forward to working with them on their findings through the Heat Trust Committee, which has the responsibility to maintain and review the standards set by Heat Trust.”
In addition, Citizens Advice has demanded that suppliers give consumers access to pre-payment meters wherever possible, and that the government implement a full regulatory regime over the long-term.
The charity’s Scottish branch similarly demanded last week that policy-makers enhance protections for district heating consumers.