Back-billing
Condition B7, Back-billing, is one of the 29 Ofgem heat network authorisation conditions. It applies to suppliers of heat, and is set out at Section B, Condition 7 of Ofgem’s Heat Network Authorisation Conditions decision of January 2026. Registration with Ofgem closes on 26 January 2027.
What this condition requires
When billing a Domestic Consumer or Microbusiness Consumer, or otherwise seeking to recover Charges from them including via a Prepayment Meter or increased direct debits, you may only do so for units of heating, cooling or hot water reasonably considered to have been consumed in the twelve months preceding that charge recovery action, and for other amounts accrued in that same period (7.1). Exceptions: charge recovery actions taken before the condition took effect; continuing steps to obtain payment where the original action complied and the consumer did not pay; where you were unable to recover the correct amount due to the consumer's obstructive or manifestly unreasonable behaviour; and any further circumstances Ofgem specifies after consultation (7.2). Critical scope limit: the twelve-month prohibition does not apply where the Charge is a Service Charge (7.3) — so schemes billing through the service charge are not constrained by it. Supply Contract terms must reflect these requirements (7.4).
Applies to
Every supplier, for Domestic and Microbusiness Consumers. 7.1 does not apply to a Service Charge (7.3).
Core requirement
The supplier, or a Representative, may recover only units consumed and amounts accrued within the twelve months before the charge recovery action.
Key obligations
7.1, the twelve month limit. 7.2, limited exceptions, including obstructive consumer behaviour. 7.4, new and varied Supply Contracts comply. 7.5, no enforcement of incompatible terms.
Evidence Ofgem will look for
- A back-billing policy applying the twelve month limit to directly metered charges
- A per network Service Charge determination
- Records of any reliance on 7.2
Why this matters
On directly metered networks the twelve month limit applies and must be enforced. On Service Charge networks 7.3 disapplies it, and any equivalent limit comes from the Landlord and Tenant Act 1985.
The condition in full
Reproduced from Ofgem’s Heat Network Authorisation Conditions decision, January 2026, Appendix 2.
Prohibition
7.1 Subject to paragraphs 7.2 and 7.3, where the authorised person or any Representative issues a Bill to a Domestic Consumer or Microbusiness Consumer or otherwise seeks to recover (including via a Prepayment Meter or via increased direct debits) Charges for supplying that Domestic Consumer or Microbusiness Consumer (hereafter a "charge recovery action"), they must only do so in respect of:
7.1.1 units of heating, cooling or hot water which could reasonably be considered to have been consumed within the twelve (12) months preceding the date the charge recovery action was taken; and
7.1.2 where applicable, other amounts if accrued within the twelve (12) months preceding the date the charge recovery action was taken.
Exceptions to prohibition
7.2 Paragraph 7.1 does not apply in the following circumstances:
7.2.1 where any charge recovery action was taken prior to the date this authorisation condition took effect;
7.2.2 the authorised person or any Representative has taken a charge recovery action in a manner which complied with paragraph 7.1 and, due to non-payment by the Domestic Consumer or Microbusiness Consumer, is continuing to take steps to obtain payment for the same units of heating, cooling or hot water and, where applicable, the same amounts in respect of a Standing Charge or other type of Charge;
7.2.3 the authorised person has been unable to take a charge recovery action for the correct amount of the units of heating, cooling or hot water due to the obstructive or manifestly unreasonable behaviour of the Domestic Consumer or Microbusiness Consumer; or
7.2.4 any other circumstances, which following consultation, the Authority may specify for these purposes.
7.3 Where the authorised person or any Representative takes a charge recovery action in relation to a Domestic Consumer or Microbusiness Consumer in relation to a Charge that is a Service Charge, paragraph 7.1 does not apply.
Terms of contracts
7.4 The authorised person must ensure that the terms and conditions of each Supply Contract that it enters into, makes or varies following the launch date comply with the provisions of this authorisation condition.
7.5 The authorised person must not enforce or take advantage of any term of a Supply Contract if:
7.5.1 the inclusion of that term is incompatible with this authorisation condition; or
7.5.2 the enforcement or taking advantage of that term would be so incompatible.
Does this apply to you?
Section B applies to the supplier of heat. This condition protects homes and micro businesses. It does not apply on industrial or self-supply networks. The registration checker works out your full set in a few questions. Registration closes on 26 January 2027.