Appendix 1: Correspondence with DESNZ
Letter from the Rt Hon. Lord Hunt of Wirral MBE, Chair of the Secondary Legislation Scrutiny Committee, to Amanda Solloway MP, Minister for Affordability and Skills at the Department for Energy Security and Net Zero
I am writing to you about the above instrument in my role as Chair of the Secondary Legislation Scrutiny Committee. The Committee considered the draft Regulations at its meeting yesterday and will comment on them in its 15th Report which will be published tomorrow, 29 February.
While we recognise that there is significant uncertainty in the figures, we are concerned that up to 60,000 domestic customers of heat networks could lose out on discounts of up to £1,200 under the Energy Bill Discount Scheme (EBDS). We are particularly concerned that this could disproportionately affect disadvantaged groups, such as the elderly and ethnic minorities, who are significantly more likely to be on a heat network. Your Department provided us with a helpful list of activities it has undertaken to encourage qualifying heat networks to apply for EBDS support and to reach these disadvantaged groups. We will publish the information in full in our 15th Report.
I would like to draw your attention to the Committee’s concerns and to seek further assurance that every effort is being made by your Department to ensure that as many domestic customers as possible receive the support to which they are entitled before the EBDS ends in March.
28 February 2024
Letter from Amanda Solloway MP, Minister for Affordability and Skills, at the Department for Energy Security and Net Zero, to the Rt Hon. Lord Hunt of Wirral MBE, Chair of the Secondary Legislation Scrutiny Committee
I would like to thank you for your letter on the 28th February, regarding the Committee’s concerns about reaching the maximum number of domestic customers through the Energy Bills Discount Scheme. I want to assure you that this is an absolute priority for my department, and that we are committed to ensure that as many customers as possible receive the support that they are entitled to.
I would like to set out some further activities taken to maximise the number of applications received, since my officials sent your committee the original list of activities.
We previously mentioned that we had identified a subset of heat suppliers which may have more vulnerable domestic customers, including social housing providers such as local authorities and housing associations. We have since expanded the scope of this activity and are now prioritising for approval all applications from charitable and non- profit heat suppliers. This has allowed us to approve 1,668 heat network applications, reaching thousands more domestic customers. We prioritised these sectors precisely because they are more likely to have customers from more disadvantaged groups.
We have issued another set of reminders to all known heat suppliers and associations in government databases. This has c.2800 subscribers and includes groups such as the National Housing Federation, the representative body for housing associations, and the Association for Decentralised Energy. This focused on encouraging further applications, the legal obligation to apply and pass this support onto customers, and enforcement activity being underway. We also asked them to contact any groups in their network who may be eligible for the scheme. We also plan to issue comms in early March to Local Authorities via DLUHC and other local government partners.
We are engaging with stakeholders such as Heat Trust to learn of any issues with the customer journey. For example, any issues customers are having on the pass-through, as well as learn of any other heat networks struggling with their applications so that we can provide support.
Lastly, you noted the significant uncertainty in the figures. I would like to reiterate that we think the actual number of customers missing out on support is likely to be lower than 60,000. We based this estimate on data from the Heat Network Metering and Billing Regulations (HNMBR), which has significant shortcomings, for example, duplication of networks and outdated heat network and supplier details. Like you, I remain concerned with how even a lower number of customers missing out is unfair, and I and my civil servants will continue to work hard to bring down these numbers before the scheme closes.
I hope that goes some way in assuaging the concerns of the committee, but we fully recognise this challenge and are determined to reach as many customers as feasibly possible.
4 March 2024