Shabana has written to the Secretary of State for Business, Energy and Industrial Strategy regarding soaring energy bills in flats and shared buildings.
Energy that is supplied to many shared buildings for communal electricity and for heating and hot water through a heat network is classified by Ofgem as commercial supply, rather than domestic.
The price cap only applies to domestic energy, meaning many constituents are facing sky-high bills as suppliers are passing on the huge wholesale price increases unchecked.
In her letter, Shabana highlights the plight of constituents already hit financially by the cladding scandal, who face an additional burden with the rising cost of living.
You can read her letter in full below.
Letter to the Secretary of State
Dear Secretary of State
I am once again writing to raise the concerns of my constituents who are living in flats about the soaring cost of their energy bills.
I previously wrote to your department on this issue in February 2022, and the Minister for Business, Energy and Corporate Responsibility, Lord Callanan responded that the Government was exploring ways to apply an equivalent of the £400 discount from the Energy Bills Support Scheme to heat network and communal energy customers.
By way of reminder, the energy that is supplied to many shared buildings for communal electricity and for heating and hot water through a heat network is classified by Ofgem as commercial supply, rather than domestic. The price cap only applies to domestic energy, meaning my constituents are facing sky-high bills as suppliers are passing on the huge wholesale price increases unchecked.
Over the summer, my constituents received their renewal quotes for the electricity, with prices per kilowatt hour increasing by more than 500%. One converted flat development in my constituency, New Hampton Lofts, has its electricity delivered directly by its own substation with individual flats metered accordingly. This means its electricity is classed as non-domestic and recently residents have been quoted rates of 90p per kwh which means my constituents are expecting bills of £1,500 per month at the height of winter.
This is completely unacceptable and unrealistic. It risks thousands of people being unable to pay their bills and is compounding the significant financial pressure many of them are under as a result of the cost-of-living crisis caused by the rise in prices of everyday essentials.
Many of those affected by this issue are also victims of the cladding scandal, and this is yet another cost with which they have been unfairly burdened simply because of where they live.
I welcome the government’s commitment to legislate for including heat networks into Ofgem’s remit, but I am concerned that this commitment currently does not extend to communal electricity and would therefore not protect residents of New Hampton Lofts, for example. Please outline whether you intend to include communal electricity customers in the protections set out in the Energy Security Bill.
I have noted that within the detail of the energy bills support package announced by the Prime Minister on 8 September, the Government have stated that an additional discretionary fund will be available for households who are outside of schemes, such as those not on standard gas or electricity. I am keen to understand whether this would include residents at New Hampton Lofts and others who are on heat networks or have buildings that use communal electricity. Additionally, is this support additional to the support Lord Callanan previously committed to, which is equivalent to the £400 EBSS discount?
I ask that you urgently clarify the details of this support, and the amount constituents can expect to receive. £400 across 6 months will not be anywhere near enough to support those facing bills of more than £1,000 each month.
As winter approaches we need this information as quickly as possible. It is not clear from the current raft of measures recently announced whether residents such as those living in New Hampton Lofts will be supported by the current Government interventions and I fear that they could slip through the net.
Shabana Mahmood MP
MP for Birmingham Ladywood