FAQs for communal heat network customers

If you have your own energy supplier that you deal with directly, you’re not on a communal heat network. However, you may still receive an energy service charge from us, for any communal areas in the building.

Communal heat network customers are usually billed by Switch2, our metering and billing contractor. In some cases we charge you for the heating in your home through service charges. You may also receive electricity through private wire, which is when your electricity is also a communal supply, as well as heat.

  • What is a heat network?

    Heat networks supply heat and hot water from a central energy source (such as a plant room or energy centre) to end consumers via a network of pipes. When the hot water is used it returns to the central source cold, so it can be heated and used again. A communal heat network is when the central energy source provides heat and hot water to several properties within one building (80 flats within a high-rise block, for example). A district heat network is when the central energy source provides heat and hot water to various properties across several buildings (3 townhouses and 80 flats across 2 high-rise blocks, for example).

  • What is heat tariff?

    The heat tariff is the price you pay for heating your home and/or using hot water. The heat tariff is broken into two parts; a unit cost charged typically in pence per kilowatt hour (known as p/kWh), and a fixed daily standing charge.

  • Who sets my heat tariff?
    We own and operate your heat network and so will usually set the tariff. The tariff is calculated on a not-for-profit basis, so only the charges that we incur will be passed onto you.
  • How often are heart tarriffs reviewed?
    We’ll be aiming to review heat tariffs every six months, in line with our commercial gas pricing reviews. This is to ensure value for money is being provided to all our customers. The current wholesale energy market remains volatile, meaning the heat tariff rates may also fluctuate.
  • What is the Energy Bill Discount Scheme (EBDS) and how will it be applied?

    The Energy Bill Discount Scheme (EBDS) is Government’s latest energy discount scheme, running from 1 April 2023 to 31 March 2024. The EBDS scheme aims to give a higher level of support to heat networks with domestic consumers. As your heat supplier, we’re required by law to apply for this discount and pass on any benefits received to you. We’re in the process of completing the required application to ensure all eligible sites can be assessed for the discount.

    More information on EBDS can be found at www.gov.uk/guidance/energy-bills-discount-scheme

  • How is my heat tariff calculated?

    The heat tariff you’re charged is made up of various components, which are outlined here:

    Gas unit charges: Gas is supplied to the plant room to create heat, which is a cost that we pay and then recharges to customers through the heat tariff. This is shown on your bill as heat/hot water and is charged at a p/kWh rate detailed in your tariff review letter.

    Gas standing charge: This is the standing charge we pay for the gas supplied to the plantroom. This a cost split between all homes supplied on a heat network. This forms part of the heat standing charge.

    Metering and billing agent fees: The installation and maintenance of heat metering equipment, as well as the administration and management of the heat network billing service, is provided by a metering and billing agent. This service is essential to the management of our heat network. We pay these costs and then recharge them to our customers through the heat tariff.

    These show on your Switch2 bill separately as Heat Standing Charge and Administration Standing Charge. They are charged at a p/day rate detailed in your heat tariff review letter.

    VAT: Utilities are typically charged to residential properties with 5% VAT, included in both unit cost and standing charge. Metering and billing agent fees (administration standing charges) are charged at 20% VAT.

  • What is system efficiency, how does it affect my tariff and how can it be improved?

    System efficiency is the calculation of how much gas is needed to supply the heat and hot water to the development you live in. For example, if 100,000kWh of gas is required to meet a heat demand of 50,000 kWh, the network is 50% efficient. This efficiency calculation is used to help determine the unit cost you will pay in your heat tariff, to make sure that the cost of gas that we pay for is covered. 

    The system efficiency can be improved by making changes to the heat network, for example by replacing old equipment or improving insulation, which is something we’re actively doing across our heat networks portfolio. This begins with optimisation studies to recommend improvement measures before the works are carried out. 

  • Why has my tariff cost changed?

    Our heat tariffs were reviewed in June 2023 to reflect new gas prices. Each heat network is operated on a not-for-profit basis. This means we’ll only recover reasonable charges to operate the heat network without profiting from doing so.

  • Do I have a choice as to what is included in the tariff and which contractors are used?

    We set our heat tariffs just to cover our costs, so it’s not possible to exclude any of the elements listed above. To help keep the costs as low as possible, we:

    • Buy gas in large amounts, which allows for competitive prices
    • Procures all our contractors through a competitive process, using value for money and cost as the key criteria.

    We’re empowered to make these decisions on our customers’ behalf, and always puts the needs of each customer first.

  • Does Hyde charge additional fees to cover the cost of administration, staff time or have any hidden costs in the heat tariff?
    We don’t include any costs for administration, staff time or have any hidden costs included in the tariff set.
  • How can I be sure Hyde is acting reasonably to ensure the best value for money and most competitive pricing for heat neatwork utility costs is taking place?

    We work hard to ensure value for money is provided to all our customers. A competitive procurement process is used at regular intervals to select the best contractor for each aspect of heat network management:

    • We buy the energy supplied to all our operated heat networks through a utilities contract which is renewed regularly. We’re able to provide the best price because of the amount of energy purchased and the way the energy is bought.
    • We choose the metering and billing agent after a competitive procurement process, which is assessed on who can give the highest quality service at the best value.
    • Each heat network is operated on a not-for-profit basis. This means we’ll only recover reasonable charges to operate the heat network without profiting from doing so.
  • Can I disconnect from the heat network?
    As set out in your Utility Supply Agreement for your home, we’re responsible for providing the utility supply to your property. This means that we must supply the heat and hot water for customers living on a Hyde heat network.