Carter Jonas
Carter Jonas

New billing rules put the heat on suppliers

Farm enterprises that have taken up renewable initiatives, such as anaerobic digestion plants, which also supply heating to tenanted properties need to be aware of rule changes that come into effect by the end of December.

The Heat Network (Metering and Billing) Regulations 2014 are bringing in a change of legislation that will affect how tenants of buildings with communal heating systems will be invoiced for their use of heating, cooling and hot water to ensure that end-users of heat are only charged for the heating they use.

Obligations imposed by the regulations on any supplier of central heating systems are wider than previous legislation and include landlords and owners of buildings where heating is supplied from a central source to more than one tenant, for example shared offices, within the definition of a “supplier”.

As well as landlords who invoice directly for heating charges, buildings where heating is included within rent or service charge payments are also included.

By 31 December 2015, each supplier must send a notification to the Secretary of State for Business, Innovation and Skills via the National Measurement and Regulation Office providing estimates of the yearly

heat capacity, heat generated, and heat supplied applying to the heat source in question. The Secretary of State must also be supplied with practical information about the location of the heat supply, the type of building in which it is contained, and the type of customer supplied. Following the initial notification this information will need to be updated with the Secretary of State every four years.

By 31 December 2016, the supplier must install meters in its building which measure the individual consumption by the end-user in all cases unless it is not cost-effective or not technically feasible to do so. The regulations contain a test for whether or not it is cost-effective for meters to be installed. Where it is not cost-effective, this must be considered again every four years and meters have to be installed upon any substantial reconstruction of, or installation of new services in, the building.

By 31 December 2016 heating for each end-user will be separately metered where possible based on actual consumption.

Non compliance by a supplier is a criminal offence and punishable with a fine of up to £5,000 per offence plus daily penalties of £500 until the breach is remedied.

For more information, see: www.gov.uk/guidance/heat-networks

Tim Jones

Tim JonesFRICS

Partner - Head of Rural Division

Tim is head of the firm's Rural Division and of the Cambridge office, although he spends a considerable amount of time in London.  He has over 20 years experience in advising institutional and pri...

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