Propertymark has welcomed Ofgem’s proposed fair pricing framework for heat networks but warned that managing agents must be supported with a simple, practical reporting system and sufficient time to adjust to their new obligations.
Ofgem’s consultation on Heat Networks Regulation: Fair Pricing Protections sets out principles for regulating pricing across heat networks – natural monopolies that have historically lacked consumer safeguards.
The 2022 gas price crisis highlighted this gap, with some heat network customers facing soaring bills and little recourse.
From 2026, under powers granted by the Energy Act 2023 and the Heat Networks (Scotland) Act 2021, Ofgem will begin regulating heat networks across Great Britain.
PRICING TRANSPARENCY
The reforms aim to introduce transparency, cost-reflective pricing and centralised price data.
Propertymark’s consultation response supports the consumer protection aims of the framework but focuses on the operational impact for managing agents, many of whom will be responsible for gathering and submitting pricing data.
The trade body warns that cost-reflective pricing must account for billing and metering expenses often borne by managing agents. It also urged Ofgem to consider the differing complexities across tenure types, including freehold and leasehold arrangements.
STREAMLINED REPORTING
Crucially, Propertymark is calling for a streamlined reporting process to ensure widespread compliance, minimise duplication and avoid unnecessary administrative burdens. It also stresses the need for a phased rollout to allow managing agents time to adjust.
In addition, Propertymark argues that heat network customers should be treated as domestic consumers (B2C) rather than businesses (B2B) – a key factor in explaining why many currently pay more for energy than households on traditional supply models.
The final framework must strike a balance between consumer fairness and practical delivery on the ground.
SIMPLE AND INTUITIVE
Nathan Emerson (main picture), Chief Executive at Propertymark, says: “Ofgem must ensure that any reporting system is as simple and intuitive as possible.
“It must not create unnecessary complications for managing agents who already face significant challenges in managing heat networks effectively, given the age and repair of some systems.
“This is especially important given the increasing role that the UK Government wants heat networks to play in heat generation, with their hope that they increase from less than 3% market share to 20% by 2050.”
