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Natural Gas: Leasehold

Question for Department for Business, Energy and Industrial Strategy

UIN 135501, tabled on 7 March 2022

To ask the Secretary of State for Business, Energy and Industrial Strategy, what steps his Department is taking to ensure that residential leasehold properties that get heating and water from communal systems are not treated as commercial users of gas and are therefore covered by Ofgem’s price cap.

Answered on

15 March 2022

Communal heating systems which purchase gas at commercial rates whilst supplying heating to domestic consumers were previously more cost effective for consumers, as commercial purchase rates tended to be lower than domestic ones. Unfortunately, it does mean that these consumers do sit outside the Ofgem price cap.

The Government is committed to ensuring heat network consumers receive a fair price for their heating and has committed to legislating within this Parliament to regulate the heat networks sector. In December, the Government announced that Ofgem will take on the role of regulator. Ofgem will be granted new powers to regulate prices as a matter of priority. Among the new powers granted, Ofgem will be able to investigate and intervene on networks where prices for consumers appear to be disproportionate compared with systems with similar characteristics, or if prices are significantly higher than those consumers would expect to pay if they were served by an alternative heating system.