How is the Heat Tariff calculated?
We want to make sure that you pay a fair price for heat and it is not easy to compare the price of heat and the price of gas. Here is what the Heat Trust has to say about it…
When we look at the cost of heating your home, for a property on a district heating network, all the costs associated with heating a home are often contained within a single heat bill. This includes the cost for the fuel (e.g. gas, biomass), repair and maintenance, metering and billing.
In comparison, a property with an individual gas boiler receives gas from the national gas network, which is then used within the property to provide heating and hot water. The costs of servicing the boiler, repairs, insurance and replacement of a boiler are separate additional costs, on top of the gas bill.
Because they include different costs, it is not accurate to compare the unit cost in a gas bill (usually in pence per kWh) with the unit cost in a heat bill (also in pence per kWh).
Using these principles, our charges are set to be comparable with the cost of generating heat from an individual boiler, which includes the cost of gas, and running, maintaining and replacing that boiler and uses the same method as set out by the Government sponsored Heat Trust Calculator developed by The Heat Trust. You can use this calculator to check our tariffs are comparable to running a gas boiler system.
In setting this tariff in this way, we are aware that some customers in council or housing association properties or those in the private rented sector are not usually directly liable for some or any of these extra costs, but some or all of these costs may be included in the rent. This comparison is the industry standard method of determining a comparable charge which is known as ‘price parity’.
If you are a Reside tenant, then you will have a reduced level of standing charge as servicing and maintenance of the HIU and the costs of the maintaining and operating energy centre and the maintenance of our network are included as part of your rent.
How will the Heat Tariff change in the future?
The Standing Charge and the Unit Charge will be linked to a combination of the change in the cost of living, a labour rate index and the changes in the wholesale gas prices, to ensure that our charges rise and fall in accordance with the market. This indexation methodology is fixed and means that we cannot raise prices unfairly and any drop in costs is passed directly back to you. This indexation adjustment normally can only happen once per year. See our Pricing Policy for details.
How is the Electricity Tariff calculated?
The initial tariff was set in September 2017 by finding the average of the cheapest deals available at that time from each of the ‘Big Six’ energy suppliers and setting our tariff to match the annual cost of 2,000kWh electricity.
We believe that by setting our tariff to match the average of every cheapest deal available from the ‘Big Six’, we can be sure that you get a fair deal and we can run our business knowing we supply low carbon energy at a fair rate.
How will the Electricity Tariff change in the future?
We believe in open and fair pricing so:
- We will normally only change the price you pay once per year in April.
- We will use a fixed formula that takes input from the price changes in the wholesale electricity market, a labour rate index and the changes in the cost of living as published by the Office for National Statistics.
By doing this, we believe that the price you pay will continue to be consistently competitive. When we do the maths every year to work out this price, we will also check that the new price is better than the average of the best electricity deals going at that time from the ‘Big Six’. The new tariff will be set at the lower of the two. This guarantees that you will always be paying a competitive and fair tariff. See our Pricing Policy for details.
The District Energy Scheme is a feature of your property.
You cannot change suppliers for your heat and even if you turn off the system, you will still be liable for the standing charge.
If we supply your electricity too, then you can switch suppliers but as we have a Private Wire Network the process is somewhat different to the way you may be used to. Please read this page for more details.