ESCO’s, S106 Agreements and Externally Managed Networks

Many housing providers enter into arrangements where they take on management of properties on a heat network but are not directly responsible for the management of the heat network itself. This might be through a section 106 agreement where a housing provider takes on management of units that are connected to a network or as part of an Energy Services Company (ESCO) arrangement with a commercial organisation.

These arrangements can pose challenges to housing providers in ensuring that their residents will be treated fairly and that the landlord obligation for the provision of heat and hot water is maintained.  This is further complicated by the variety of potential different commercial and management arrangements involved, which can add complexity, additional providers into the heat network supply chain, frustration for customers and confusion for housing managers.

Chirpy Heat has experience assisting housing providers with these arrangements and is here to help. We can support your organisation with the following services:

ESCOs:

• Options overview and appraisal: to understand the different types of ESCO available and which might be right for the development opportunity
• Specification and design review: to ensure that the scheme will meet your needs
• Procurement support: to make sure that you are procuring the best provider for the opportunity. This can include initial soft market testing, development of scope of services, input into key documents, ensuring appropriate providers are notified and invited to tender as well as judging responses.
• KPI/Performance monitoring: to understand ongoing performance in terms of heat network metrics and customer satisfaction
• Contract management: to help housing providers engage ESCO partners to maintain and improve good standard of service delivery
• Tariff reviews: to ensure your tenants are getting fair and transparent pricing

S106 Schemes – Managed by External Agents

• Development of ‘red lines’: a set of organisational guidelines or flags that constitute large or unacceptable risks for S106 schemes with heat networks
• Review of proposed management and metering arrangements: as part of development opportunities and negotiations, including flagging key risks and diversions from any organisational approach
• Metering strategy: investigate whether it is possible and advisable to bring the metering back under direct management
• Tariff reviews: to ensure your tenants are getting fair and transparent pricing
• Monitoring and benchmarking: of performance, comparing schemes to other heat networks of similar size, age and build in the sector
• Engagement with managing agents: to improve performance and customer experience and to resolve disputes