Pass-through regulations published on energy bill support
The Government has introduced legislation that requires landlords to pass-on the benefits of measures brought in to help with energy costs to tenants, in response to rising prices.
Landlords who do receive the benefit of energy support schemes must contact their tenants by November 30, or within 30 days of receiving the benefit and inform them about the requirements, the amount to be passed on and other key information.
Background
In response to an unprecedented rise in energy prices, the Government introduced a number of measures designed to help consumers pay for their energy use. The Energy Bills Support Scheme (EBSS) and Energy Price Guarantee (EPG) launched in October 2022 and mitigate the cost increases to households over the winter months to March 2023. A separate scheme, the Energy Bill Relief Scheme (EBRS) provides support for businesses and non-domestic customers.
The EPG reduces the cost of gas and electricity to all households with a standard supply contract, while the EBSS provides a non-repayable £400 discount on energy bills. Both measures are applied directly to standard energy accounts, and in most cases the end user of the energy will be the account holder.
However, in instances where an ‘intermediary’ exists, for example where a landlord charges rent inclusive of energy bills, the Government has legislated to ensure that the benefits of the schemes are passed-on to the end user or tenant.
The requirements
The Energy Bills Support Scheme and Energy Price Guarantee Pass-Through Requirement Regulations 2022 (the Regulations) came into force on 1 November 2022 and make clear that a landlord charging rent inclusive of energy bills must pass-on the benefit of the schemes to a tenant.
The Regulations stipulate that a “just and reasonable proportion of the benefit must be passed-on in a “just and reasonable way”. Guidance produced by the NRLA looks at what this is likely to mean in practice in a number of different circumstances.
Some uncertainties remain
There remain some practicalities associated with the legislation that the NRLA is seeking clarification on. In particular, separate heat network legislation exists that we are seeking urgent clarification on before we provide guidance.
NRLA has also sought additional clarity on the provision of information requirements, and whether in practice they require a landlord to communicate the benefit being paid to a tenant every month. We will update members once we have had a satisfactory response from BEIS on these points.
In the meantime, guidance is available to NRLA members which covers the remainder of the Regulations and sets out the steps landlords need to take over the next few weeks in order to comply.
