14^th May 2015

Heat suppliers must submit a notification to the Secretary of State of the following—

(a) the location of the communal heating;
(b) the estimated total for the communal heating, per calendar year,
of—
(i) installed heating capacity,
(ii) heat generated, and
(iii) heat supplied;
(c) the number and type of buildings supplied by the communal heating;
(d) the number and type of meters or heat cost allocators installed
(e) the number of final customers supplied
(f) the name and business address of the heat supplier;
(g) The results of any cost analysis calculations
(h) the expected frequency and content of billing information
(i) any other information reasonably required

• Where the landlord is a heat supplier , the landlord must notify the NMRO by 31 December 2015.using the NMRO draft template for additional guidance see NMRO heat networks legislation

(4) Where there is more than one final customer in a building supplied by communal heating, the heat supplier must ensure that meters are installed to measure the consumption of heating, cooling or hot water by each final customer (comes into force on 31st December 2016).

The heat supplier must ensure that temperature control devices are installed to enable the control of the consumption of heating or cooling by a final customer from that district heat network or communal heating.

A heat supplier need not comply unless it is cost effective and technically feasible to do so.

A determination of cost effectiveness and technical feasibility must be made by the heat supplier

Where a heat supplier has determined that installation of meters is not cost effective or technically feasible, a further determination must be repeated by a heat supplier within four years of the date of the first determination

Cost effectiveness analysis: the net present value of projected energy savings over the 10 year period subsequent to installation is greater than the net present value of the estimated costs of installing the meters.

Factors to be considered regarding cost effectiveness: The building type, age and number of dwellings, the number of storeys, the geographical location, costs of access to private dwellings including legal costs, costs of access to or isolation of pipework, costs of repair to decoration or building fabric, costs of installation of temperature control devices, the cost of equipment and software to collect data used for billing, the cost of issuing bills and billing information, the cost of re-calibrating the meters periodically.

DECC have devised a calculator to calculate the cost effectiveness.

Where it is not technically feasible to install individual meters in each room, the heat supplier must still notify the regulator and must also install heat cost allocators and thermostatic radiator valves at each rooms’ radiator in order to determine and enable the control of the consumption of heating by each final customer and a hot water meter. Again these only need installing if cost effective and technically feasible but it is likely that TRVs would always be required given the low cost and ease of installation.

Affects of the legislation

• If the landlord pays the heating bill and does not pass that cost onto the tenants, the landlord does not fall under the regulations.

• If the landlord pays the total bill and has a fair use policy and then sends the individual tenants a small bill representing usage over what the landlord regards as “fair”, the regulations will apply Electric heating in individual rooms where the landlord supplies an electric heater is not covered by the legislation, even if individual electricity bills are issued.

• Many properties and owners will not be set up to deal with this level of technical advance. The property will need Wifi or bluetooth if a 4th generation continuous monitoring system is utilised. 3rd generation systems only calculate usage 1 or 2 times a year so an inaccurate reading may not be picked up for 6 months (eg. If the monitor is tampered with).

• More landlords will look at replacing boiler with electric heating as it will be cheaper for them but more expensive for tenants. This may impact on fuel poverty and HHSRS ratings. Costs will undoubtedly be passed onto tenants.

• There are no registers of HMOs except those that are licensed. Appeals to notices under this legislation will be heard by the First Tier tribunal service which is likely to be swamped. The enforcing authority will be the National Measurement Office (NMO).

• Most boiler systems will use radiators. These will have to be fitted with Heat Cost Allocators, a small box that measures the radiator temperature and the room temperature. It is possible that tenants will tamper with these or destroy them so that an accurate reading cannot be taken and the heating charges for their room(s) is reduced.

• It is not clear how billing will apply to heating that is not in a tenants room, such as in corridors, bathrooms and kitchens.