UK government watchdog alerted over misleading district heat scheme

The UK’s Competition and Markets Authority (CMA) has received correspondence from residents of a housing scheme who say they have been financially misled as to the benefits involved in being part of a district heating system.

The government watchdog has been alerted by residents of energy efficient Orchard Village Rainham homes in the London borough of Havering, who are angry at the price of energy they are being billed for, contrary to what they believed the system would save them when they purchased the homes.
Havering Council
Marketing material found on Havering Council’s website states the estate boasts an energy centre that reduces energy consumption by 20pc and reduces energy bills for residents.

The Romford Recorder reports that around 15 residents have written to the CMA over actual energy costs exceeding amounts they believed they would pay.

One resident told the paper, “I was given an energy performance certificate [which says] costs would be around à‚£334 per year [for heating and hot water]. Actual costs on average are between à‚£1,500 and à‚£2,000.”

A council spokeswoman called the online brochure material on the advantages of the heat network system an oversight and said a request for it to be removed from the website had been made.

A spokeswoman, for energy suppliers Scottish and Southern Energy (SSE) said: “As a responsible company, SSE’s customer communications are open and transparent.à‚  However, we are aware that third party marketing material in circulation which has not been endorsed by SSE has been misleading.”

While unfortunately there is no supply switch mechanism for district heating customers, private owners who wish to disconnect from the network and source an alternative means of heating and hot water are able to do so. We are disappointed that customers of SSE Southern Electric have experienced problems and understand their concerns. We are reviewing the situation and are committed to working constructively with our customers to resolve ongoing issues.”

Residents are locked into a 25-year contract for the supply of heat and hot water, except for private home-owners who have the option to disconnect.

There is also a standing charge of à‚£500 per year for the energy supply included in the contract, which residents say they had not been made aware of when signing up.

A CMA spokeswoman said: “The CMA is aware of concerns about the district heating sector, and has recently been called on to investigate the sector by The Citizens Advice Bureau.”

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