Fair Pricing
Condition A6, Fair Pricing, is one of the 29 Ofgem heat network authorisation conditions. It applies to every authorised person, and is set out at Section A, Condition 6 of Ofgem’s Heat Network Authorisation Conditions decision of January 2026. Registration with Ofgem closes on 26 January 2027.
What this condition requires
Charges imposed on Applicable Consumers must be fair and not disproportionate (6.1). The condition is interpreted in accordance with Ofgem's fair pricing guidance, which sets out how Ofgem will determine fairness and gives examples of the methods it may use (6.2-6.4); that guidance may be revised after consultation (6.5-6.6). Scope: this condition does not apply where the authorised person carries on regulated activities only in relation to Industrial Heat Networks or Self-Supply Networks, and where it also serves other networks the condition is construed as not applying to the Industrial or Self-Supply activities (6.7-6.8).
Applies to
Every authorised person, except on Industrial or Self-Supply Networks.
Core requirement
Charges to consumers must be fair and not disproportionate, judged against Ofgem's fair pricing guidance: six principles and a fairness test.
Key obligations
6.1, fair and not disproportionate charges. 6.2, read with the guidance of 13 January 2026.
Evidence Ofgem will look for
- A documented basis for each network's tariff, tested against the six principles
- Proof that costs recovered elsewhere are not charged again
- A record of who made each pricing decision
Why this matters
The authorised person answers for pricing on every network, whoever calculates the tariff. A contractor's methodology does not move the duty.
The condition in full
Reproduced from Ofgem’s Heat Network Authorisation Conditions decision, January 2026, Appendix 2.
6.1 The authorised person must ensure that charges imposed on Applicable Consumers are fair and not disproportionate.
6.2 This authorisation condition shall be interpreted in accordance with guidance published by the Authority for the purposes of this condition.
6.3 Before this authorisation condition comes into effect, the Authority shall publish the guidance referred to in paragraph 6.2.
6.4 The guidance referred to in paragraph 6.2 shall:
6.4.1 make provision about how the Authority is to determine; and
6.4.2 give examples of some of the methods that may be used by the Authority to determine, whether charges are fair and not disproportionate.
6.5 Before the Authority publishes the guidance referred to in paragraph 6.2 the Authority shall consult with such persons or bodies as it considers appropriate to consult.
6.6 The Authority may from time to time revise the guidance referred to in paragraph 6.2 and before issuing any such revised guidance the Authority shall consult such persons as specified in paragraph 6.5 setting out the text of, and the reasons for, the proposed revisions.
Application of authorisation condition
6.7 Where the authorised person carries on regulated activities only in relation to relevant heat networks that are either Industrial Heat Networks or Self-Supply Networks, this authorisation condition shall not apply.
6.8 Where the authorised person carries on one or more regulated activities in relation to Industrial Heat Networks or Self-Supply Networks in addition to carrying on one or more regulated activities in relation to any other relevant heat network, this authorisation condition shall be construed as if it does not apply to the authorised person's activities in relation to Industrial Heat Networks or Self-Supply Networks.
Does this apply to you?
Section A applies to every authorised person, so this condition applies to you regardless of whether you operate the network, supply heat over it, or both. The registration checker works out your full set in a few questions. Registration closes on 26 January 2027.