Author: Dan Goss

PRESS RELEASE: New report shows E.ON’s district heating ‘not fit for purpose’ on regenerated London estate

28/04/17

Embargoed for Sunday 30^th April 00:01am

A new report [1] released today and featured on BBC Radio 5 Live Investigates (Sunday 30 April) documents South London residents’ ongoing problems with a new “district heating” system they cannot leave for the next 35 years.

District heating has the potential to cut costs and carbon emissions [2], but for council residents and private leaseholders on the Myatts Field North estate and Oval Quarter development in Lambeth, it has so far been a very bad experience for many from which there is currently no escape.

These residents were connected to a new heat network run by E.ON without proper consultation as part of a controversial regeneration scheme under the Private Finance Initiative (PFI) starting from 2012. Lambeth’s district heating contract with E.ON is binding until 2052.

E.ON promised residents a continuous supply of heat on demand cheaper than traditional gas boilers. They were also promised that smart meters would ensure they were only billed for actual heat and hot water used without the need for manual meter readings.
But this has hasn’t been residents experience. “Not Fit for Purpose” gives more than 50 real-life examples of residents, many vulnerable through age, disability, illness, or financial insecurity, who have experienced a number of failings.

Problems include:

• very high bills that are often based on grossly-exaggerated estimates due to the failure of the smart meters and expensive tariffs with a standing charge of more than £1 a day that have forced some to switch their heating off due to fuel poverty;
• major reliability failings with at least 48 outages over the past four years and some households left for days, weeks, months and even a year without properly functioning heating or hot water, forcing some people to buy electric heaters and pay to shower at a local gym;
• intermittent and variable water temperatures that have forced some households to boil kettles to run baths with one vulnerable resident installing an electric shower due to the unreliability.
• poor customer service and complaint handling with residents having to fight just to get E.ON to take their meter readings, log complaints and provide compensation.

Some concerned residents believe a combination of these failings may have contributed to the tragic death of an elderly man with dementia in October 2016. He had spent months in a state of terrible anxiety over his high estimated bills and felt unsupported by E.ON and the Housing Management. It has been reported that he had difficulties paying the bills and buying food and was found dead with no food in his fridge.

In January this year, the then head of E.ON’s “Heat” division [3] met representatives of three local residents associations, together with Fuel Poverty Action and other concerned parties. He was shocked to hear how bad things were, apologised and promised change.

Since then, there have been a series of specific promises on meter reading, repairs, servicing, and customer service, and the scheme will be among the very first to be audited by the Heat Trust – a voluntary body which offers the heat industry’s own rules in place of the regulation that governs suppliers of gas or power.

However, there are doubts as to the independence of the Heat Trust, a number of the problems continue, and there has been no response to some of the most serious concerns and proposed remedies in the report.

Now residents are challenging E.ON to overhaul the whole system, accept a review of its pricing and provide proper compensation for four years of misery.

Uzoamaka Okafor, Chair of Myatts Field North Residents Association and PFI Monitoring Board, (MFN-RAMB) says:

“It is wholly unacceptable that residents in a newly built £150 million regeneration project should have to endure such poor service delivery especially as unlike other consumers we are unable to switch energy providers to enable choice and better deals. There have been historic failures in delivery of this service with little regard given to resident’s recurrent voiced concerns and lived experiences. Many residents feel powerless and frustrated with what they feel is an absence of accountability from not only E.ON but Lambeth Council. Despite many promises essential change often appears drawn-out and challenging. Regulation is imperative to hold energy providers to account, otherwise customers suffer, particularly the vulnerable.”

The Chair of the private residents’ Oval Quarter Residents Association (OQRA), Mena Rego, says:

“This report encompasses the experiences of a wide and fairly unusual cross section of the community in terms of people who are experiencing fuel poverty on this development. Young professionals, who are first time buyers in Oval Quarter or tenants renting accommodation here, already struggle with the high costs of living in London. Many have been caught completely unaware by the high fixed costs – over a £1 a day – they must pay before using even a single kilowatt of energy to heat their homes or get hot water. Most frustrating is that they cannot take up the constantly trumpeted Government advice to consumers to shop around for a better deal! That is why we are calling for a Fair Heat Price Review to ensure that tariffs are transparent, affordable and value for money.“

Dr Stuart Hodkinson of the University of Leeds says:

“District heating is being embraced by central government, Local Authorities and housing associations around the country. As the Myatts Field North example shows, estate regeneration is increasingly being seen as an opportunity to create new district heating schemes with private energy companies on long-term contracts that lock in residents for decades. If they work and are affordable, this is great. But what incentives do private companies like E.ON have to deliver on price and service when they have a heat and hot water monopoly? The Myatts Field North experience is a wake-up call to government to ensure the heat industry is properly regulated and consumers protected. Our report shows clearly that the PFI model of district heating doesn’t work and we urge government and other bodies to learn the lessons of this worst-practice example.”

Ruth London from Fuel Poverty Action (FPA) [4] comments:

“You wouldn’t buy a car that broke down every 100 miles yet residents have no choice other than to buy expensive heat and hot water from a district heating system that has broken down 48 times in 4 years. E.ON now promise change, but are still ignoring residents’ demands for proper accountability and a price review. Fuel Poverty Action – and many others – believe that as district heating is rolled out across the country there must be a condition on private companies, or councils, receiving public support for new heat networks: they should first have to put right existing networks which they run and are failing to deliver. Together with regulation of the growing Heat Network industry, this would ensure that district heating fulfils its promise of affordable, low carbon heat. And it will mean the end of a nightmare for residents on Myatts Field North.”

CONTACT

Residents and Dr Stuart Hodkinson are available for interview – contact FPA.

Email: [email protected]

Twitter:@fuelpovaction

Phone: 07751 748 026

NOTES TO EDITOR

[1] The report is entitled “‘Not Fit for Purpose’: Residents’ Experiences of E.ON’s District Heating System on the Myatts Field North Estate and Oval Quarter development in Lambeth”. It has been compiled with additional research by Dr Stuart Hodkinson, School of Geography, University of Leeds, and Ruth London, Fuel Poverty Action on behalf of Myatts Field North Residents Association and PFI Monitoring Board, Oval Quarter Residents Association, and Oval Quarter Notting Hill Residents Association. It will shortly be available to for download here: www.fuelpovertyaction.org.uk/research.

[2] Dubbed ‘central heating for cities’ by the Government, district heating is where heat is pumped into flats from a central source instead of being produced by in the home by a boiler or heater. It has the potential to bring down both costs and carbon emissions. In many places it does so, dramatically reducing fuel poverty, improving health and comfort, and cutting carbon. It is being embraced by central government, Local Authorities and housing associations around the country. See https://www.gov.uk/government/news/new-central-heating-for-cities-to-help-reduce-energy-bills.

[3] Also known as “E.ON Community Energy”. See https://www.eonenergy.com/for-your-business/community-energy/what-is-community-energy.

[4] Fuel Poverty Action is a grassroots group which has been campaigning for five years for an affordable, sustainable and democratic energy system. See https://www.fuelpovertyaction.org.uk/.

# # #

Friends,
You will have seen – and felt – the massive price rises coming through again.  After many months of promises, it looks pretty certain that the Government will propose some sort of action on this as part of a green paper some time in April.
Of course, a green paper is just consultation, and any measures they propose are unlikely to affect next winter’s bills.  In the meantime, the price rises are now, and they are heaviest on electricity, so this will continue to pinch our already squeezed budgets through the summer.
We fought hard to get a better cap on Prepayment Meter prices, but at least it was a step in the right direction. The government are unlikely to go for a straightforward cap – but they might, if we can build enough pressure. It is also being advocated by the Labour Party.
Last week, we put out a press release and wrote to MPs about the need for a cap – and not a “relative” one – on the standard variable tariff.  This is the tariff that two thirds of customers are on.  Only a small minority follow the many exhortations to “Switch” — and finally there was a debate in Parliament about how switching is not the solution. You can see the debate here.
It was pointed out that Northern Ireland still has price regulation, and a majority of countries in the European Union still have price controls of one sort or another. It was also made clear that although the companies like to blame the rising cost of “green crap” for their own high prices, in fact social and environmental measures – like the Warm Homes Discount for pensioners and insulation for fuel poor households – only make up 9% of bills, and also serve to bring bills down..
Please let us know if you or anyone you’re in touch with would be ready to speak out about how rip-off price rises are affecting you personally. Do get in touch –  the media are often keen to hear people’s personal experiences.
Email us as usual on [email protected].
In solidarity!

We have written to numerous MPs on the subject of tomorrow’s debate on energy prices, and to inform them of the increasing urgency of responding to the unregulated implementation of district heating systems nationally, in the hopes this will feature in the conversation. Below is the full letter:
Dear [name of MP],
We write in relation to the cross-party debate tomorrow secured by Caroline Flint, John Penrose, and Patricia Gibson, recognising that constant calls for switching are no solution for customers being exploited on default tariffs.  We hope you will help push this motion to the vote.
The points on fuel prices below (1) are not a briefing: the facts and the tragic statistics on fuel poverty, including the 8,000 people who died from cold homes last winter, do not need to be rehearsed here.  However, we thought you might find our comments useful as they reflect what we hear from angry and desperate energy customers every day.
They are followed (2) by some points on district heating, which we hope you may be able to raise in this context.  These may be less well known, but  as you know your constituents in Myatts Field and the Oval Quarter are facing fuel poverty as a result of district or communal heating systems which were badly planned, procured, and installed, and are being badly managed, without any regulatory control.
 

1. The need for an absolute cap on prices of domestic fuel

This debate is a chance for Parliament to finally acknowledge that mass switching is not the solution to extortionate energy prices.  Experts are frustrated and baffled that customers don’t “engage” with the market.  But millions of us see the whole thing as a distraction and a con.  Many refuse to spend precious hours, on a procedure that for most of us is not simple, only to see the price comparison change a few months later.  And if loads of us switched, the market would simply “adjust” with higher prices for all.
We can also expect to see it adjust if the government goes for a “relative price cap” limiting the worst tariffs to a percentage higher than the best, as advocated by Conservative ex-minister John Penrose, one of the three MPs sponsoring this cross-party debate (Guardian, 13 March). The lowest tariffs would go up, and would bring the cap up with them – more of the cat and mouse game with consumers we’ve been seeing for years.
We cannot accept the arguments offered against a cap that could save lives.  We are told that a cap would have a chilling effect on competition – as if protecting competition were a higher priority than protecting lives.  A cap would be a minimum, not a maximum.  There is nothing to stop any supplier from offering tariffs well below the cap, and advertising that they have done so.  We are also told that an absolute cap, as opposed to a relative one, would make the market slower to respond to change.  But so far, it has responded quickly to any hint of rising wholesale prices, and with the speed of a tortoise when wholesale prices go down.  And there cannot be any credibility in charges of “interference” with the market when the market has exploited so many for so long.
Denver McKay, the fuel poor energy customer in Glasgow quoted in Sunday’s Observer (12 March)  presents the views of millions:  “It’s privatisation that’s the problem,” Mckay said. “The government has given them billions, and their bosses are taking home million-pound salaries. It doesn’t matter if they’re rubbish. But what can you do?”
Energy is too important to be governed by the market. It should be controlled by the people who use it, owned municipally, cooperatively, or in many of the new organisations that have sprung up despite the government decimating support for the renewable sources on which many new schemes are based.  We also need good insulation, efficient boilers, and communal heating systems that do not cost the earth.  In the meantime, there should urgently be an absolute – not relative – cap on prices, at a level that does not leave thousands dying every winter in cold homes.
 

2. Regulation of district heating

Heat networks in housing blocks or in districts, have huge potential to bring costs down and to save on carbon emissions, and tenants and residents in many places have benefited from them.  But each of you is aware, from your own constituents, that for others the reality is very different from the promises.  The industry is unregulated, and networks are commonly badly designed, badly procured, badly installed, and then badly operated and managed, with no redress and no escape for users who are locked into contracts for decades.  Many users find that they are subject to frequent outages of both heat and hot water, cold hot water, and appalling customer service, in what are effectively unregulated monopolies.
There are well-run networks, often managed by local authorities or housing associations, whereas others, often run in the private sector, have seen corners cut at the design and installation phase, contributing to poor operation and high costs.  Due to the way the schemes are financed, and the lack of regulation, many of them impose such high tariffs and standing charges that many customers are not using their heating at all, preferring to buy electric heaters, or go cold.  Tragically, we know of one gentleman who died, apparently not having been eating due to worry about his heating bills, and having failed to get help.
We are aware that district heating is not the topic of debate on Thursday.  But heat network customers would be only peripherally, if at all, protected by any cap on retail prices of fuel[1] and must not be forgotten.  The suppliers of heat are in many cases the same as the suppliers of gas and electricity – notably E.ON and SSE – but while they are regulated in one arena and can be heavily fined for breaches, they are unrestrained when they are supplying heat.  We hope that you will raise this point on the basis of the representations that have been made to you by your constituents, and thereby help to put this issue on the Parliamentary agenda.   At stake is not only the health – in fact the lives – of people in fuel poverty on heat networks now, but the future of district heating itself, which, for all its advantages, could be widely rejected if things carry on as they are at present.
The Scottish government is currently conducting a consultation on Heat and Energy Efficiency Strategies, and Regulation of District Heating.  The concerns and proposals suggested even in the consultation document are well worth considering in Westminster.
Under increasing pressure from Tenants and Residents Associations, growing media interest, and the initiative some of you have taken in Parliament and parliamentary committees, there is now a new attempt by the industry itself to put forward proposals for change.  As well as a focus on increasing “investor certainty”, a new industry task force initiated by the Association for Decentralised Energy
“will also consider how to build on the existing customer protection scheme, Heat Trust, including important consumer issues such as heat pricing, contract length and contract structure, areas which Heat Trust is not permitted by law to address.”
This is clearly the time for increased pressure.  We hope you will use the opportunity of this debate, and would also be glad to be in touch with you about how to proceed with this issue in the future.   We have recently submitted detailed proposals on the issue to the GLA, and would be happy to forward this to you.
Best wishes,
[your name]
 
Feel free to use this text as a template with which to engage your own MP! See also our press release on tomorrow’s debate for a quote.

Fuel Poverty Action will be taking part in the International Women’s Strike that has taken off in 47 countries all over the world in response to the growing attacks on women and children’s living standards, health and safety, wherever we live. In the UK austerity and cuts are said to affect women twice as hard as men, with women carrying 85% of the burden of the government’s changes to the tax and benefits system by 2020.
The 8th March budget promises more of the same.
Small wonder many are deciding it is time for an International Women’s Day for the 99%!

On the spot or remotely, some of us will be joining the Global Women’s Strike in their London activities through the day (see their fantastic short videos: Why we are Striking on International Women’s Strike, 8 March and Why we are striking – All African Women’s Group). They’ve also prepared a full schedule of the day.
Fuel Poverty Action are a participating organization in this strike and have endorsed the call for a living wage for mothers and other carers. The lack of recognition and lack of payment for the work of caring – primarily done by women – is a major cause of fuel poverty, particularly but by no means only for single mothers, people with disabilities, and full time carers.
Then, when we get old, women’s pensions often reflect the fact that many spend some years “off work” – but actually working hard — raising families, so women pensioners get even less than men. Pensioners are the vast majority of the thousands who die every winter because they cannot heat their homes.
The day begins at 9.45am outside the Central Family Court in London, with mothers who have lost their children. What is called “neglect” by social services often comes down to poverty – caused by insufficient wages and benefits, soaring rents and unpayable fuel bills. We are constantly hearing from mothers in despair about how to keep their children warm, even when the children are ill.
We will then take part in a Speak-Out at 12 outside Parliament, and see a short play by the All African Women’s Group who suffer the most extreme destitution, surviving, often with children, on far less than statutory benefits. The play will show “the sexism and racism of the immigration system – from Yarl’s Wood Detention and Removal Centre to the courts.”
Little value is attached to the work of caring for the planet and our local environments and the work of fighting climate change. The third event will honour Southern Peasant Federation of Thailand and others who are risking their lives to defend land and water from corporate land grabs.
Meanwhile, feminists are organising an action at 1pm outside the Irish Embassy under the banner Strike 4 Choice, in solidarity with Irish women who are demanding the repeal of the 8th Amendment, which criminalises abortion in that country, forcing women to seek unsafe or expensive methods of abortion when it should be freely accessible to all women on the basis of bodily autonomy. Check out Strike4Repeal’s galvanising video, and another excellent one from Swedish comrades, “Towards a feminist social strike”. Other groups, like Sisters Uncut, will take action against domestic violence, which takes the lives of two women in the UK every week.

There are also actions happening all over UK, and the world! The full map is available at bit.ly/iwsmap. You can take part online via twitter @WomenStrike and @Strike_4_Repeal and @NonUnaDiMeno (not one more!) which articulates the call in Italy. Use the hashtags #M8, #Strike4Repeal and #NonUnaDiMeno. Put a poster in your window, or a broom outside your door, the symbol of women going on strike and sweeping out injustice.
However you want to do it, join us in striking for justice for women – and no more deaths from fuel poverty!