Heat networks regulation: fair pricing protection guidance

Closes 27 Oct 2025

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Fair pricing

Summary

In the draft fair pricing guidance document, we outline guidance on the fair pricing authorisation condition.

Details

The draft fair pricing guidance outlines how the fair pricing obligation for heat networks will be applied in practice.

It sets out minimum expectations and best practice aligned with a set of pricing principles and introduces a fairness test to assess whether prices are fair and not disproportionate.  

This framework supports the implementation of the ‘fair pricing’ authorisation condition, which places a general obligation on authorised persons to ensure prices are fair and not disproportionate.

The framework includes:

  • an overarching objective that consumers pay fair and not disproportionate prices
  • consumer and industry outcomes
  • six guiding pricing principles

Authorised persons are expected to apply these guiding principles in a way that is consistent with the overall objectives and outcomes.

The draft guidance also introduces a segmentation approach, recognising that different types of heat networks may require a targeted regulatory approach.

Before you give us your views

You'll need to read the full details in:

1. Do you agree, partially agree, or disagree with the proposed guidance in relation to the cost-reflective principle?
(Required)
2. Do you have any suggestions to improve guidance in relation to the cost-reflective principle?
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3. Do you agree, partially agree, or disagree with the proposed guidance in relation to the cost efficiency principle?
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4. Do you have suggestions to improve guidance in relation to the cost efficiency principle?
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5. Do you agree, partially agree, or disagree with the proposed guidance in relation to the fair and reasonable returns principle?
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6. Do you have suggestions to improve guidance in relation to the ‘fair and reasonable returns’ principle?
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7. Do you agree, partially agree, or disagree with the proposed guidance in relation to the affordability principle?
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8. Do you have suggestions to improve guidance in relation to the affordability principle?
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9. Do you agree, partially agree, or disagree with the proposed guidance in relation to the regulatory control principle?
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10. Do you have suggestions to improve guidance in relation to the regulatory control principle?
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11. Do you agree, partially agree, or disagree with the proposed guidance in relation to the price transparency principle?
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12. Do you have suggestions to improve guidance in relation to the price transparency principle?
(Required)
13. Do you agree, partially agree, or disagree with the proposed ‘fairness test’?
(Required)
14. Do you have suggestions to improve guidance in relation to the ‘fairness test’?
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15. Do you agree, partially agree, or disagree with the proposed market segmentation approach?
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16. Do you have suggestions to improve the proposed segmentation approach?
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17. Do you agree, partially agree, or disagree with the proposal that the fair pricing framework would cover all non-domestic consumers, including larger non-domestic consumers?
(Required)
18. If you disagree with the proposal to include all non-domestic consumers within the scope of the fair pricing protections, please specify what changes you would like to see and provide a justification.