Does anyone have detailed knowledge of this Ofgem guidance about Maximum Resale Price for energy?: https://www.ofgem.gov.uk/sites/default/files/docs/2005/10/11782-resaleupdateoct05_3.pdf
In our case, the freeholder is a local authority and they "re-sell" heat to their tenants and leaseholders. None of the properties have meters. Each year, the total estimated charge for everyone's usage over the impending 12 months is divided up so that tenants and leaseholders with properties of the same size are all billed the same amount (which they can pay quarterly or monthly). All this is done using a fund/budget called the Heating Pool. At the end of the year, there is a positive or negative adjustment to accounts based on actual usage.
For the year Apr 1st 2022-2023, the forecast charges were very high due to rising gas prices. To mitigate this, the LA used "reserves" from within the Heating Pool to discount the charges, apparently on the understanding that this would need to be balanced in a future year. No adjustment was made at the end of the year.
For the year Apr 1st 2023-2024, the forecast was even higher, but there were no more reserves. The LA nevertheless discounted the charges, again on the understanding that this would need to be paid back in future to balance the books. That forecast turned out to be a significant over-estimate (because prices fell) so residents got some money back through the adjustment.
For the year Apr 1st 2024-2025, prices have stayed down, so the LA has decided to use the opportunity to balance its books. They have set the estimated charges artificially high, to help offset some of its discounting in the previous two years.
I'm wondering if all this balancing from year to year - i.e. borrowing from the future to keep charges down when energy prices are high, and compensating by over-charging when prices come down, is in the spirit of Ofgem's guidance. In the above examples, tenants/leaseholders who move.into their properties now, at the start of 2024 will be paying through the nose for their energy, without having had the benefit of the discounts in the previous 2 years.
I'd be interested in the opinion of someone who knows about residents' rights in these circumstances - the guidance says energy resale overcharging can be challenged in the small claims court, but I'm wondering just how challengable these circumstances are likely to be.