Issue - meetings

To consider recommendations from Cabinet arising from the review of District Heating Charges.

Further to Minute No. 76 of the meeting of the Cabinet and Commissioners held on 13^th November, 2017 consideration was given to the report which recommended the reduction of the kwh charge to 6.28p per kwh with no standing charge for 2017-18 which would be applied retrospectively from 1st April, 2017.  These cost reductions would mean that charges for district heating in Rotherham for 2017-18 were comparable to both Sheffield and Doncaster.

Members welcomed the cost reduction for tenants on district heating and this would ensure the adoption of a charging structure that was fair to all tenants on district heating throughout the Borough.

Resolved:-  (1)  That the revised district heating cost model be approved.

(2)  That the unit Kwh charge across all district heating schemes be reduced to 6.28p per kwh (incl. VAT) and apply retrospectively from 1 April 2017.

(3)  That the weekly pre-payment charges on all pooled schemes be reduced as detailed in Option 3 of the report.

Mover:-  Councillor Beck                            Seconder:-  Councillor Read

Report of the Strategic Director of Adult Care and Housing

(Exempt Appendices)

Cabinet Member:     Councillor Beck

Commissioner:         Kenny (in advisory role)

Recommendations:

1.    That the content of the report be noted.

2.    That the Council be recommended:-

a)    To approve the revised district heating cost model.

b)    To reduce the unit Kwh charge across all district heating schemes to 6.28p per kwh (incl. VAT) and apply retrospectively from 1 April 2017.

c)    To reduce weekly pre-payment charges on all pooled schemes as detailed in Option 3 of the report.

Consideration was given to the review of district heating which had been undertaken following capital investment made to infrastructure that had improved the efficiency and concerns raised by tenants on the Swinton Fitzwilliam Estate about the high cost of heating.

A previous report to Cabinet in July 2017 recommended that a weekly standing charge of £2 be introduced to enable a reduction in kwh charge to 5.65p so mitigating a payment spike for residents on the Swinton Fitzwilliam Estate who were on pre-payment meters. The equivalent charge per kwh if no standing charge was levied would have been 7.09p per kwh. There were concerns expressed by some tenants and Ward Members that prompted a further review of charges to be undertaken.

Subsequently, the review focused on anticipated costs for 2017-18 based on full year operating costs for 2016-17 now being available and the known cost reductions from significant investment in district heating infrastructure over the last three years now coming to fruition.

Option 3 was the favoured option and this would limit cost recovery to fuel costs only. All staffing, administration and metering costs have been omitted and would in future be funded through general HRA resources which was the same as staffing costs associated with Gas Servicing and Safety inspections for individual central heating systems. All charges would be applied retrospectively from 1st April, 2017 and relevant refunds placed on the rent account and issued as part of district heating quarterly billing cycle. Tenants on pre-payment meters would be issued with refunds for the period 1st April to 30th November, 2017 following decision by the Council. The remaining refund for the period 1st December to 13th December, 2017 would be applied as a credit to the heat meter. By processing the refunds in this way it would ensure tenants received a refund prior to Christmas. The new charge rate would be applied to the meter remotely on 14th December, 2017. 

This report, therefore, recommended the reduction of the kwh charge to 6.28p per kwh with no standing charge for 2017-18 which would be applied retrospectively from 1st April, 2017. These cost reductions would mean that charges for district heating in Rotherham for 2017-18 were comparable to both Sheffield and Doncaster.

This report had been considered by the Overview and Scrutiny Management Board as part of the pre-scrutiny process who were in support of the recommendations.

Individual circumstances relating to specific concerns would be investigated further and work would continue with Ward Members.

Resolved:-  (1)  That the report be received and the contents noted.

(2)  That Council:-

a)          Approve the revised district heating cost model.

b)          Reduce the unit Kwh charge across all district heating schemes to 6.28p per kwh (incl. VAT) and apply retrospectively from 1st April, 2017.

c)          Reduce weekly pre-payment charges on all pooled schemes as detailed in Option 3 of the report.