Back-billing
Suppliers of heat to domestic consumers. Section B applies where heat is supplied to domestic consumers. A network serving only non-domestic consumers is not subject to it.
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).
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.
103 Decision Heat networks regulation: authorisation conditions
Does this apply to you?
Section B applies where heat is supplied to domestic consumers. If every consumer on your network is non-domestic, this condition does not apply. The registration checker works out your full set in a few questions. Registration closes on 26 January 2027.