Decision details

Date of Decision:

18 March 2024

Title:

Revision to District Heating Pricing for 2024-25

Decision Maker:

(Including Job Title)

James Clark, Assistant Director of Housing

Details of Specific Cabinet Delegation

or Delegation contained in the relevant Sub-Scheme of Delegation.

Council agreed on 28 February 2024, minute number 104(8), that the decision to reduce the price of District Heating Charges further during 2024-25 be delegated to the Assistant Director of Housing in conjunction with the Assistant Director of Financial Services following consultation with the Cabinet Member for Housing. The delegation would only be used to respond to a change in Government policy or a significant change in the Ofgem price cap that has the effect of necessitating a lower unit price.

Decision:

Revise the unit price charged for District heating from 1 April 2024 to 12.86 pence per kwh.

Note that further reductions may be necessary if the Ofgem price cap for subsequent quarters matches energy market forecasts.

Reasons for the Decision:

There will be a 12% reduction in the Ofgem price cap from 1 April 2024 and energy market forecasts predict further reductions in the cost of energy until December 2024. The Council has committed to ensuring that the average bill for residents on District heating match’s the average bill of a resident with gas and benefiting from the Ofgem price cap.

Details of alternative options considered and rejected:

Two alternative pricing options have been considered:

1.    A revised price of 11.66 pence per kwh was considered to negate the need for further price reduction. This was based on an average of the Ofgem price cap for Q1 2024-25 and market forecasts for Q2 & 3 2024-25.  This option was rejected as it took the average District heating bill to less than an average gas bill under the Ofgem price cap for Q1 2024-25 and relied on unofficial forecasts.

2.    A revised price of 10.94 pence per kwh. This was based on the lowest market forecast for the period Q1 to Q3 2024-25. This option was rejected as it took the average District heating bill to less than an average gas bill under the Ofgem price cap for Q1 2024-25 and relied on unofficial forecasts.

Conflicts of interest declared by any Cabinet Member consulted by the decision maker which relates to the decision:

N/a

Dispensations Granted:

(If any)

N/a

Reports or parts of reports considered

The report of the Strategic Director of Adult care, Housing and Public Health, Ian Spicer – HRA Business Plan, Rent Setting and Service Charges 2024-25