An Oldham couple was given a nasty shock when they received a letter saying their gas prices had more than tripled due to a quirk with how their home is heated.
Roger Ward, a semi-retired accountant, was left worrying he may need to withdraw his pension early to afford the increased bill.
The 61-year-old lives with his fiancée Pamela, who has lived on the estate for 30 years and works as a carer, on the Eldon Street estate.
“This is the sort of estate where people keep themselves to themselves, to be honest, because there is quite a lot of trouble that goes on on it.
“You tend to keep your head down, you close your front door and you’re in your own little domain,” Roger said.
Roger and Pamela received a letter from First Choice Homes Oldham last week telling them their gas price was going up from 10.63p per kilowatt hour, a measure of power, to 36.28p per kWh – more than tripling.
This is despite the government’s energy price guarantee, which sets a limit of 10p per kWh on domestic gas prices.
The reason? Roger and Pamela’s house, which is owned by Pamela and not under First Choice Homes management, is heated by a communal boiler shared with other houses on the estate.
This type of heat system isn’t covered by the government’s normal price cap.
To make matters worse, Roger only received the letter, dated February 27, telling him of the price hike on May 2 – but the letter said prices were going up from April 3.
The letter was sent out late due to an administrative error, according to First Choice Homes.
Confusion and stress
The news caused confusion and stress, with First Choice Homes sending the letter but Roger and Pamela paying Switch2, which manages the heat network.
Pamela said communication from the companies involved was poor, adding: “We emailed them three times and they’ve not come back to us.”
Roger worried that he might have to withdraw his pension early to help pay the increased bill.
He added: “If we had the money to move, that would be the only way out of it. But the housing is so cheap here, three-bedroom terraced houses are fetching somewhere between £110,000 and £120,000.
“Where else can you buy a house for that sort of money? It’s the poorest of the poor on this estate.”
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Roger added: “All the people living on these estates with network heating systems are potentially going to have the issues that we are having, they might well be a lot worse off than we are, and if we can’t afford it, how on earth are they supposed to afford it?”
Pamela added: “I’m worried about how we’re going to manage over the winter, especially.
“It’s never been this expensive. Ever.”
Heat networks
Heat networks form a part of the government’s net zero strategy – offering a communal solution to heating which is said to lower energy costs as well as carbon emissions.
As heat networks purchase energy through commercial contracts, the Energy Price Guarantee doesn’t apply like it does for domestic customers with their own gas meter.
Instead, those on heat networks will now receive support through a different scheme, the Energy Bills Discount Scheme.
While suppliers will have to apply, applications for the scheme only opened on April 26 – weeks after the price rose for Roger and Pamela, and it had not been made clear to them how it would work.
Following contact from The Oldham Times, First Choice Homes Oldham has now confirmed that it will be applying for the discount scheme, and the government has confirmed that any discounts will be backdated to the beginning of April.
First Choice Homes responds
A spokesperson for First Choice Homes Oldham said: “We understand that it is a very difficult time with the rising cost of living, and we are working extremely hard to minimise the impact of these price rises on our customers.
“The energy tariffs for our communal and district heating systems are based on the wholesale price of gas, plus the costs from our service providers to monitor, maintain and improve the heating system.
“The new tariffs reflect the current price of wholesale gas charged by energy suppliers, which is considerably higher than it was in summer 2020 when we negotiated the last fixed price contract.
“As a result, customers on our district and communal heating systems haven’t been affected by the higher energy bills that many households have experienced during this period.
“Due to an unfortunate administrative error, a small number of our energy customers were only notified about the price rise this week. This is not how we usually work with our customers, and we sincerely apologise for this.
“As we are doing with other customers who are worried about additional costs, we are working with Mr Ward to provide any advice we can on his energy usage and managing costs, but recognise that it has taken longer than we would have liked.
“In addition, we are exploring the Government’s Energy Bills Discount Scheme (EBDS) as a means to provide further help to customers with their energy costs.
“The portal has now opened and we are progressing with the registration process. We’d like to reassure Mr Ward that any Government support we receive will be passed on via a reduction in the tariff.”
Government responds
A Government spokesperson said: “While we cannot comment on individual cases, we know it has been a difficult time for families, which is why the Government covered around half of the typical household’s energy bill this winter.
“Heat network customers receive support through our Energy Bills Discount Scheme. Heat suppliers – such as housing associations – must apply for this support and the law requires them to pass on savings to residents in a just and reasonable way.
“The support will be backdated to cover all energy usage between 1 April 2023 – 31 March 2024 and will ensure that customers on heat networks do not face disproportionately higher bills when compared to customers in equivalent households who are supported by the Energy Price Guarantee.”
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