Manchester residents found themselves ‘frozen or homeless’ after their energy supplier raised prices by 300%.
The hugely inflated bills hit people living in a building in New Islington, central Manchester, after their former supplier CNG Energy took office in November.
All residents of the building must use the same boiler and have the same energy supplier.
After CNG collapsed, Pozitive Energy was appointed by regulator Ofgem to resume their supply – but residents told the Manchester Evening News their monthly bills were skyrocketing.
When the bills arrived in December, just days before Christmas, residents were asked to pay triple or even quadruple the previous amounts.
One bill went from £ 56.29 in August 2021 to £ 152.63 in December, another went from £ 42.02 to £ 215.29 and another from £ 66.70 to £ 260.56.
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Manchester Evening News)
The letters sparked an uproar in the building, where tenants and owner-occupants rub shoulders.
Jeff Swales, 35, said: “I don’t think they appreciate the effect that letter had just before Christmas – it was devastating.
“There was a woman with a £ 300 bill she was sitting in the hall in tears saying ‘I don’t know how I’m going to pay’.
“I took out a payday loan to cover it and now I’m moving.
“I’m going to sleep on a friend’s couch.”
Jeff, an IT professional, is one of the many tenants who have moved into the Chips building as part of a Rent to Buy program.
The program means eligible tenants pay 80 percent of the market rate so they can save 20 percent on a future deposit.
But tenants say rising energy prices mean there is no more financial sense in living there.
Luke Ives, 30, who also participates in the Rent to Buy program, said: “That 20% doesn’t go towards a mortgage, but towards energy bills.
“People are leaving because it’s unaffordable.”
In the meantime, residents have said they are too afraid to turn on the heat or even take hot showers.
“I have a plug-in oil heater,” said Luke, who works in engineering.
“I don’t want a £ 300 bill.
“If it’s cold, we just put on extra layers.”
Adam Labatt, 34, another Rent to Buy tenant, added: “This winter I just don’t use it [the heating].
“It’s absolutely freezing cold, a lot of us are working from home all the time but we’re afraid to turn on the heat.
Manchester Evening News)
“Part of life here was saving – especially as a single person – so that I could have my own property, that’s what attracted me.
“I can’t do this when I have these bills.
“I’m cutting back on other things – it could be deciding not to go out or do a big grocery store.”
The tenants deal with several parties, including Urban Splash, the property management company RMG and the company that handles billing for the “district” heating system, Switch2.
In addition to being celebrated for its unique architecture, much emphasis has been placed on its green features, including a “green” heating system designed to generate electricity while capturing the heat produced in the process.
This means that all residents operate with the same boiler and are therefore confined to the same energy supplier.
Current residents say the situation has deteriorated with periods of up to three months without heating or hot water in recent winters.
This is disputed by RMG who claim that the boiler has never failed for more than 24 hours since its replacement in 2017.
In an article on its website about the CHIPS building, Switch 2 acknowledged the historical issues and described how the company was brought in by Urban Splash to “improve both the efficiency of the system and the heat supply of its residents “.
The boiler needed to be replaced because it was “damaged and not working efficiently for residents,” according to the publication.
Residents “have stopped paying their bills” and the heating system has started to go into debt, he adds.
The project to replace the boiler and take over metering and billing reduced pre-existing debt by 68%, according to Switch2.
But it appears these problems have continued and residents now feel trapped by the arrangement that keeps them locked in with one vendor.
“The worst part is we can’t change providers,” said Adam.
“Or we’d go around the world. But we’re stuck, there’s nothing we can do, it’s like that or all together.”
Magdalena Mikulak, whose bill went from £ 80 per month to £ 260 for December, added: “I always assumed the bills were already high, now they just skyrocketed, I don’t know how it is. is durable.
“And it’s not even hot, I just use the heat enough not to get cold, not to freeze to death.
“People are moving because of this.”
A Switch2 spokesperson said, “Switch2 Energy is the billing service provider for the Chips program and is not responsible for operation and maintenance. Therefore, we can only comment on the metering and billing and why the rate has increased.
Switch2 provides billing services for New Islington Utilities. The site’s energy supplier, CNG, took office in November and Ofgem has assigned a supplier of last resort to respond.
“The new tariff reflects the market increases recorded over the past 12 months, which have seen the wholesale gas price increase 5 times since January 2021.
“Like all other domestic consumers who will be, or currently are, facing a significant price increase, heating and energy costs will increase at Chips.
“We understand that the annual energy bill for gas and electricity at Chips is increasing by 47%.
“Typically, the bills that customers receive include a unit heat charge based on their meter readings.
“This covers the cost of gas and electricity used in the technical room of the common heating system. ) and billing activities. “
RMG Director of Operations Justin Herbert said: “There have been historical issues with the boiler system at Chips, but the developer provided an additional boiler in 2017 at no cost to tenants and since then the system boiler has not failed for more than 24 hours. the last failure was in October 2021 but this was resolved the same day.
“Collective boilers heat hot water and water pumps pump hot water around the building.
“RMG is currently maintaining the common parts of the heating system.
“There are currently no known faults with the communal system and both boilers are operating efficiently.
“RMG has no involvement in any public utility contracting or contracting or billing, but sympathizes with the increasing costs that residents of Chips and across the country are now facing.
“Regarding the coating situation, the safety of residents has been the priority since we identified the problem and we have followed the advice of the fire brigade, surveyors and the Greater Manchester Fire Department with all parties confident that we have taken the necessary short-term corrective action. This saw the implementation of an integrated fire alarm system.
Plumlife Director of Private Sector Management Caroline Millington said: “We sympathize with our customers about the increase in energy tariffs because it is a problem in all areas.
“We are asking for clarification on behalf of our customers because neither the maintenance of the heating system nor the choice of the energy supplier is under our control. “
Urban Splash declined to comment.