# The Heat Network (Metering and Billing) Regulations 2014

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U.K.

Statutory Instruments

# 2014 No. 3120

Energy

# The Heat Network (Metering and Billing) Regulations 2014

Made

20th November 2014

Laid before Parliament

26th November 2014

Coming into force in accordance with regulation 1

These Regulations are made by the Secretary of State, being a Minister designated for the purposes of section 2(2) of the                           European Communities Act 1972 F1 in relation to energy and energy sources F2 in exercise of the powers conferred by section 2(2) of that Act.                        

F11972 c.68; section 2(2) was amended by the Legislative and Regulatory Reform Act 2006 (c.51), **section 27(1)(a)** and the European Union (Amendment) Act 2008, section 3(3), Schedule, Part 1.

F2European Communities (Designation) Order 2010 (S.I. 2010/761).

## **PART 1**U.K.Introductory

### Citation and commencementU.K.

1.—(1) These Regulations may be cited as the Heat Network (Metering and Billing) Regulations 2014.                  

(2) Except as provided in paragraphs (3) and (4), these Regulations come into force on 18th December 2014.

(3) Regulation 9 comes into force on 31st December 2014.

(4) Regulations 4(4) and 6 come into force on 31st December 2016.

### InterpretationU.K.

2.  In these Regulations—                  

“authorised person” means—                  

the Secretary of State,

the Scottish Ministers, or

a person authorised under regulation 10(2);

“bill” means a demand for payment from a heat supplier to a final customer for the supply of heating, cooling or hot water by that                     heat supplier;                  

“billing” means the issuing of a bill;                  

“billing information” means the information specified in paragraph 4 of Schedule 2 provided by the heat supplier to a final customer in respect                     of the supply of heating, cooling or hot water from a district heat network or communal heating operated by that heat supplier;                  

“communal heating” means the distribution of thermal energy in the form of steam, hot water, or chilled liquids from a central source in a                     building which is occupied by more than one final customer, for the use of space or process heating, cooling or hot water;                  

“district heat network” means the distribution of thermal energy in the form of steam, hot water or chilled liquids from a central source of production                     through a network to multiple buildings or sites for the use of space or process heating, cooling or hot water;                  

“final customer” means a person who purchases heating, cooling or hot water for their own end consumption from a heat supplier;                  

“heat cost allocator” means an instrument for the measurement of energy consumption of a room heating radiator where that energy has been supplied                     from the district heat network or communal heating operated by a heat supplier;                  

“heat supplier” means a person who supplies and charges for the supply of heating, cooling or hot water to a final customer, through—                  

communal heating; or

a district heat network;

“meter” means an instrument designed to measure, memorise and display the consumption of heating, cooling or hot water by a final                     customer where that heating, cooling or hot water has been supplied from a district heat network or communal heating operated                     by a heat supplier; and                  

“Scottish network” means a district heat network or communal heating where the majority of final customers of the network or communal heating                     are located in Scotland.                  

## **PART 2**U.K.Duties in respect of metering and billing

### Duty to notifyU.K.

3.—(1) Heat suppliers must, in relation to each district heat network or communal heating operated by them, submit a notification                     to the Secretary of State, or in relation to a Scottish network the Scottish Ministers, as to the following—                  

(a)the location of that district heat network or communal heating;                  

(b)the estimated total for that district heat network or 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 that district heat network or communal heating;                  

(d)the number and type of meters or heat cost allocators installed in any buildings supplied by that district heat network or                        communal heating;                  

(e)the number of final customers supplied by that district heat network or communal heating;                  

(f)the name and business address of the heat supplier;                  

(g)where any analysis as to cost effectiveness or technical feasibility has been carried out pursuant to these Regulations, the                        results of that analysis together with details of any meters or heat cost allocators which have been installed as a result;                  

(h)the expected frequency and content of billing information provided by the heat supplier to the final customers; and                  

(i)any other information reasonably required by an authorised person for the purpose of determining whether the heat supplier                        has complied with the duties in these regulations.                  

(2) Heat suppliers must comply with the duty in paragraph (1)—

(a)on or before the 30th April 2015; or                  

(b)in relation to a district heat network or communal heating that commences operation after 30th April 2015, on or before the                        first date of operation.                  

(3) A heat supplier must submit an updated notification within four years of the date of the first notification submitted and                     within every four year period thereafter from the date of the previous notification.                  

### Duty to install metersU.K.

4.—(1) Where heating, cooling or hot water is supplied from a district heat network to a building occupied by more than one final                     customer, the heat supplier must ensure that meters are installed to measure that heating, cooling or hot water to that building.                  

(2) A meter installed in accordance with paragraph (1) must be situated at a heat exchanger in that building or at the point of                     entry of the district heat network pipes into the building.                  

(3) Where only one final customer occupies a building supplied by a district heat network, the heat supplier must ensure that                     meters are installed to measure the consumption of heating, cooling or hot water by that final customer.                  

(4) Where there is more than one final customer in a building supplied by a district heat network, or 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.                  

(5) A heat supplier need not comply with paragraphs (3) and (4) unless it is cost effective and technically feasible to do so.

(6) A determination of cost effectiveness and technical feasibility under paragraph (5) must be made by the heat supplier in accordance                     with Schedule 1.                  

(7) Where a heat supplier has determined that installation of meters is not cost effective or technically feasible, a further                     determination in accordance with Schedule 1 must be repeated by a heat supplier within four years of the date of the first                     determination and if meters have not been installed within every four year period thereafter from the date of the previous                     determination.                  

(8) Where a meter to which paragraph (3) or (4) applies is installed, 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.                  

(9) Where a meter to which this regulation applies is installed the heat supplier must ensure that is satisfies the requirements                     of regulation 5.                  

Commencement Information

I1S. 4(1)-(3), (5)-(9) in force at 18.12.2014, s. 4(4) in force at 31.12.2016, see reg. 1

### 

5.  Where a meter to which these regulations apply is installed it must accurately measure, memorise and display the consumption                     of heating, cooling or hot water by a final customer.                  

### Replacement of existing meters, new buildings and major renovationsU.K.

7.—(1) Where an existing meter which is part of a district heat network or communal heating is replaced the heat supplier must ensure                     that the replacement meter satisfies the requirements of regulation 5.                  

(2) Where—

(a)a connection is made in a newly constructed building supplied by a district heat network, or                  

(b)a building supplied by a district heat network undergoes major renovations which relate to the technical services of that                        building,                  

the heat supplier must install sufficient meters to measure the consumption of heat, cooling or hot water by each final customer                     occupying that building.                  

(3) A heat supplier need not comply with paragraph (1) if it would be technically impossible to do so or the estimated cost would                     be unreasonable.                  

(4) In this regulation—

(a)“building envelope” means the integrated elements of a building which separate its interior from the outdoor environment;                  

(b)“major renovation” means the renovation of a building where the total cost of the renovation of the building envelope or the technical services                        is higher than 25% of the value of the building, excluding the value of the land upon which the building is situated;                  

(c)“technical services” means technical equipment for the heating, cooling, ventilation, hot water or lighting (or any combination thereof) of a                        building; and                  

(d)“value of the building” means the reinstatement costs of the building for insurance purposes.                  

### On-going obligations in relation to meters and heat cost allocatorsU.K.

8.  Where meters or heat cost allocators to which these Regulations apply are installed the heat supplier must so far as possible                     ensure those meters and heat cost allocators are —                  

(a)continuously operating, and                  

(b)properly maintained and periodically checked for errors.                  

## **PART 3**U.K.Enforcement

### Enforcement authorityU.K.

10.—(1) These Regulations shall be enforced by the Secretary of State or in relation to a Scottish network by the Scottish Ministers.                  

(2) The Secretary of State, or the Scottish Ministers in relation to a Scottish network, may authorise in writing any person who                     appears suitable to act on the Secretary of State's or the Scottish Ministers' behalf to carry out any functions and to exercise                     any power conferred by these Regulations other than those in regulation 15.                  

(3) Schedule 3 (powers of entry and warrants) and Schedule 4 (civil sanctions) have effect.

### OffencesU.K.

11.—(1) It is an offence for any heat supplier to fail to comply with—                  

(a)regulation 3 (duty to notify);                  

(b)regulation 4 (duty to install meters);                  

(c)regulation 6 (heat cost allocators and hot water meters);                  

(d)regulation 7 (replacement of meters, new buildings and major renovations);                  

(e)regulation 8 (on-going obligations); or                  

(f)regulation 9 (billing).                  

(2) No person may be prosecuted for an offence under paragraph (1) in respect of any failure to comply which occurred before 30th                     April 2015.                  

(3) It is an offence to obstruct an authorised person acting in the pursuance of their powers or duties under these Regulations.

(4) In this regulation, “powers or duties” include powers or duties exercisable by virtue of a warrant under paragraph 3(1) of                     Schedule 3.                  

### Bodies corporate in ScotlandU.K.

12.—(1) Where in relation to a Scottish network—                  

(a)an offence under these Regulations has been committed by a body corporate or a Scottish partnership or other unincorporated                        association; and                  

(b)it is proved that the offence was committed with the consent or connivance of, or was attributable to any neglect on the part                        of—                  

(i)a relevant individual; or                  

(ii)an individual purporting to act in the capacity of a relevant individual,                  

the individual as well as the body corporate, Scottish partnership or unincorporated association commits an offence and is                     liable to be proceeded against and punished accordingly.                  

(2) In paragraph (1), “relevant individual” means—                  

(a)in relation to a body corporate—                  

(i)a director, manager, secretary or other similar officer of the body;                  

(ii)where the affairs of the body are managed by its members, a member;                  

(b)in relation to a Scottish partnership, a partner;                  

(c)in relation to an unincorporated association other than a Scottish partnership, a person who is concerned in the management                        or control of the association.                  

### PenaltiesU.K.

13.—(1) Any person found guilty of an offence under regulation 11(1)(a), (e) or (f) or (3) shall be liable on summary conviction to                     a fine not exceeding the statutory maximum, or in Scotland a fine not exceeding level 5 on the standard scale.                  

(2) Any person found guilty of an offence under regulation 11(1)(b) to (d) shall be liable—

(a)on summary conviction to a fine not exceeding the statutory maximum; or                  

(b)on conviction on indictment to a fine.                  

### Time limit for prosecution of offencesU.K.

14.—(1) An offence under these Regulations may be tried by summary proceedings if—                  

(a)in England and Wales, the information is laid;                  

(b)in Northern Ireland, the complaint is made; or                  

(c)in Scotland, the proceedings are begun,                  

before the end of the period of 12 months beginning on the day after the date on which evidence which the authorised person,                     or in Scotland the Procurator Fiscal, thinks is sufficient to justify the proceedings comes to that authorised person's or                     Procurator Fiscal's knowledge.                  

(2) For the purposes of paragraph (1)—

(a)a certificate signed by or on behalf of the prosecutor and stating the date on which such evidence came to the authorised                        person's or Procurator Fiscal's knowledge is to be conclusive evidence of that fact; and                  

(b)a certificate stating that matter and purporting to be so signed is to be treated as so signed unless the contrary is proved.                  

## **PART 4**U.K.Review

### ReviewU.K.

15.—(1) The Secretary of State must from time to time—                  

(a)carry out a review of these Regulations;                  

(b)set out the conclusions of the review in a report; and                  

(c)publish the report.                  

(2) In carrying out the review the Secretary of State must, so far as is reasonable, have regard to how the Directive is implemented                     in other Member States.                  

(3) The report must in particular—

(a)set out the objectives intended to be achieved by the regulatory system established by these Regulations;                  

(b)assess the extent to which those objectives are achieved; and                  

(c)assess whether those objectives remain appropriate and, if so, the extent to which they could be achieved with a system that                        imposes less regulation.                  

(4) The first report under this regulation must be published before the end of the period of five years beginning with the day                     on which these Regulations come into force.                  

(5) Reports under this regulation are afterwards to be published at intervals not exceeding five years.

Amber Rudd

 Parliamentary Under Secretary of State

 Department of Energy and Climate Change

20th November 2014

 Regulations 4(6) and 6(4)

## SCHEDULE 1U.K.Determination of cost effectiveness and technical feasibility

1.—(1) Where sub-paragraph (2) applies it will be considered cost effective for the purposes of regulations 4(6) and 6(4) for the                     heat supplier to install meters in a building in accordance with regulations 4(3) to (4) and 6(2).U.K.

(2) This sub-paragraph applies where the net present value of projected energy savings to all the final customers in the building                     supplied with heating cooling or hot water by the heat supplier, over the 10 year period subsequent to installation, is greater                     than the net present value of the estimated reasonable costs of installing the meters in that building.                  

2.  The matters to be taken into account in estimating the costs of installation are the capital, installation, operation and                     maintenance costs of the meters, taking into account—U.K.

(a)the building type, age and number of individual private dwellings or non-domestic premises in the building;

(b)the number of storeys in the building;

(c)the geographical location of the building;

(d)in the case of a building not containing private dwellings, the type of use of the building;

(e)whether the costs could be reduced if another building supplied from the same district heat network is also to have meters                        installed in accordance with these regulations;

(f)any costs of access to private dwelling or non-domestic premises including legal costs;

(g)any costs of access to or isolation of pipework;

(h)any costs of repair to decoration or building fabric as a consequence of the installation;

(i)any costs of installation of temperature control devices;

(j)the cost of equipment and software to collect data from the meters to be used for billing;

(k)the cost of issuing bills and billing information; and

(l)the cost of re-calibrating the meters periodically to ensure accuracy of performance.

3.  The projected energy savings over the 10 year period subsequent to installation for the purpose of paragraph 1 is—U.K.

(a)20% of the benchmark heat demand rate in the case of a building consisting mainly of private dwellings, except for the one                        year period subsequent to installation when the projected value to be applied is 10% of the benchmark heat demand rate; and

(b)10% of the benchmark heat demand rate in the case of any other building except for the one year period subsequent to installation                        where the projected value to be applied is 5% of the benchmark heat demand rate.

4.  It will be considered technically feasible to install meters in a building consisting mainly of private dwellings unless—U.K.

(a)there is more than one entry point for the pipes of the district heat network or communal heating into each private dwelling                        within that building or the entry point for the pipes is unknown; or

(b)the heat distributed from the district heat network or communal heating is by means of water with a temperature above 90 degrees                        Celsius.

5.  It will be considered technically feasible to install meters in a building not consisting mainly of private dwellings unless—U.K.

(a)the heat distributed in the building from the district heat network or communal heating is by means of a system other than                        hot water;

(b)there is more than one entry point for the pipes of the district heat network heating or communal heating into each private                        dwelling or non-domestic premises in a building or the entry point of the pipes is unknown; or

(c)the district heat network or communal heating supplies cooling and the cooling distribution system uses a transfer fluid other                        than water.

6.—(1) Where sub-paragraph (2) applies it will be considered cost effective for the purpose of regulation 6(4) to install heat cost                     allocators and thermostatic radiator valves in accordance with regulation 6(2).U.K.

(2) This paragraph applies where the net present value of the projected energy savings to the final customers in the building                     over the 10 year period subsequent to installation is greater than the net present value of the estimated reasonable costs                     of installing a heat cost allocator and thermostatic radiator valve for every radiator in that building.                  

7.  The matters to be taken into account in estimating the costs of installation of heat cost allocators and thermostatic radiator                     valves are the capital, installation, operation and maintenance costs of the heat cost allocators and thermostatic radiator                     valves taking into account—U.K.

(a)any cost of access to private dwelling or non-domestic premises including legal costs;

(b)the cost of equipment and software to collect data from the heat cost allocators to be used for billing;

(c)the cost of re-calibrating the heat cost allocators periodically to ensure accuracy of performance; and

(d)the cost of issuing bills and billing information.

8.  The projected energy savings over the 10 year period subsequent to installation for the purpose of paragraph 6 is—U.K.

(a)20% of the benchmark heat demand rate in the case of a building consisting mainly of private dwellings, except for the one                        year period subsequent to installation when the projected value to be applied is 10% of the benchmark heat demand rate; and

(b)10% of the benchmark heat demand rate in the case of any other building except for the one year period subsequent to installation                        when the projected value to be applied is 5% of the benchmark heat demand rate.

9.  For the purpose of this Schedule, the one year period and 10 year period subsequent to installation begin the day after completion                     of the installation of—U.K.

(a)all the meters in a building, or

(b)all the heat cost allocators, thermostatic radiator valves and hot water meters in a building.

10.  In this Schedule “benchmark heat demand rate” means the benchmark heat demand rate for the type of building in question set out in the Department of Energy and Climate                     Change paper titled “Assessing the cost effectiveness of individual metering: Energy Demand Benchmarks” and dated 14th November                     2014 F3.U.K.

F3Published on the DECC website at www.gov.uk/government/consultations/implementing-the-energy-efficiency-directive-metering-and-billing-of-heating-and-cooling.

11.  A real discount rate of 9% is to be applied to calculate net present value under this Schedule.U.K.

 Regulations 2, 9(1) and (3)

## SCHEDULE 2U.K.Minimum requirements for billing and billing information

1.  At least once a year a bill must be issued to the final customer on the basis of actual rather than estimated consumption                     provided that—U.K.

(a)the final customer has provided a meter reading, or

(b)the heat supplier has taken a meter reading.

2.  Where the final customer has opted to receive electronic billing or where the final customer so requests, billing information                     must be issued by the heat supplier at least quarterly.U.K.

3.  Where billing information is not issued by the heat supplier at least quarterly in accordance with paragraph (2), billing                     information must be issued by the heat supplier at least twice a year and with every bill issued.U.K.

4.  Billing information means the following information—U.K.

(a)current energy prices charged to the final customer by the heat supplier;

(b)information about the final customer's energy consumption from the heat supplier;

(c)where available, comparisons of the final customer's current energy consumption from the heat supplier with consumption for                        the same period in the previous year, if possible displayed in a graph; and

(d)contact information, including website addresses, for organisations from which information may be obtained on available energy                        efficiency improvement measures and technical specifications for products which use energy.

5.  The information specified in sub-paragraph 4(d) must also be supplied to the final customer by the heat supplier when—U.K.

(a)a contract for the supply of heating, cooling or hot water is sent to the final customer by the heat supplier, or

(b)any changes to such a contract are sent to the final customer by the heat supplier.

6.  It will be considered technically possible and economically justified to issue bills and billing information to final customers                     in accordance with regulation 9(1) where the estimated reasonable costs of issuing them does not exceed £70 per final customer                     per calendar year.U.K.

7.  The matters to be taken into account in estimating the cost of issuing bills and billing information are the costs of—U.K.

(a)collecting, storing and processing meter readings;

(b)preparation and issuing of the bill and billing information;

(c)processing of payments; and

(d)issuing of demands for payment if a bill is not paid.

 Regulation 10(3)

## SCHEDULE 3U.K.Powers of entry and warrants

### Power to enter premisesU.K.

### Power to inspect, seize and detain products etc.U.K.

### WarrantsU.K.

### Conditions for warrantsU.K.

### Duration of warrantU.K.

 Regulation 10(3)

## SCHEDULE 4U.K.Civil sanctions

### **PART 1**U.K.Power to impose civil sanctions

#### Authorised personU.K.

### **PART 2**U.K.Compliance notices

#### Imposition of a compliance noticeU.K.

#### Notice of intentU.K.

#### Making representations and objectionsU.K.

#### Compliance noticeU.K.

#### Contents of compliance noticeU.K.

#### Appeals against a compliance noticeU.K.

#### Criminal proceedingsU.K.

### **PART 3**U.K.Enforcement undertakings

#### Enforcement undertakingsU.K.

#### Contents of an enforcement undertakingU.K.

#### Criminal proceedings and compliance noticesU.K.

#### Discharge of an enforcement undertakingU.K.

#### Inaccurate, incomplete or misleading informationU.K.

### **PART 4**U.K.Non-compliance penalties

#### Non-compliance penaltiesU.K.

### **PART 5**U.K.Withdrawing or amending a notice

15.  The authorised person may at any time in writing—U.K.

(a)withdraw a notice imposing a non‐compliance penalty notice or reduce the amount specified in the notice;

(b)withdraw a compliance notice or amend the requirements imposed by the notice in order to reduce the amount of work necessary                        to comply with the notice.

### **PART 6**U.K.Appeals

#### AppealsU.K.

### **PART 7**U.K.Guidance and publicity

#### Guidance as to use of civil sanctionsU.K.

#### Consultation on guidanceU.K.

#### Publication of enforcement actionU.K.

## Explanatory Note

(This note is not part of the Regulations)

These Regulations implement Articles 9(1) and (3), 10 and 11 of Directive 2012/27/EU of the European Parliament and of the Council on energy efficiency (OJ No. L315, 14.11.2012, p.1), amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC.                     

Regulation 3 imposes a duty on heat suppliers, in relation to the operation of communal heating or a district heat network,                        to notify the Secretary of State or in relation to a Scottish network the Scottish Ministers about the operation of such heating                        or networks.                     

Regulation 4 imposes a duty on heat suppliers to ensure meters are installed in specified circumstances. Schedule 1 sets out                        how cost effectiveness and technically feasibility are to be determined.                     

Regulation 5 sets out requirements in relation to meters installed in accordance with these Regulations.

Regulation 6 imposes a duty on heat suppliers to ensure individual heat cost allocators, thermostatic radiator valves and                        a hot water meter are installed in specified circumstances.                     

Regulation 7 imposes a duty on heat suppliers to install meters when an existing meter is replaced, a new connection is made                        in a new building or a building undergoes a major renovation.                     

Regulation 8 imposes on-going requirements in relation to meters and heat cost allocators installed in accordance with these                        Regulations.                     

Regulation 9 stipulates that where meters or heat cost allocators to which these Regulations apply are installed, bills and                        billing information for heat, cooling or hot water provided to final customers must comply with the requirements set out in                        the regulation and Schedule 2.                     

Regulation 10 provides that the Regulations will be enforced by the Secretary of State or in relation to a Scottish network                        the Scottish Ministers or such person as may be authorised in writing to act on their behalf. Schedule 3 provides for powers                        of entry, search and seizure and the procedure for obtaining a warrant. Schedule 4 provides for civil sanctions which the                        authorised person may impose in relation to an offence committed under regulation 11.                     

Regulation 11 provides for offences for failing to comply with specified duties under the Regulations. Regulation 12 makes                        provision for offences committed by bodies corporate and relevant individuals in Scotland. Regulation 13 sets out penalties                        following criminal conviction for an offence under regulation 11. Regulation 14 specifies time limits for prosecution of criminal                        offences.                     

Regulation 15 requires the Secretary of State to review the operation and effect of these Regulations and publish a report                        within five years of them coming into force.                     

A full impact assessment of the effect that this instrument will have on the costs of business, the voluntary sector and the                        public sector is available at the Department of Energy and Climate Change, 3 Whitehall Place, London SW1A 2AW and is published                        with the Explanatory Memorandum alongside the instrument on www.gov.uk/government/consultations/implementing-the-energy-efficiency-directive-metering-and-billing-of-heating-and-cooling.