The average Enviroenergy customer in Nottingham will see their yearly energy bill rise by £86 after the city council decided to increase the price of its tariffs.
Enviroenergy was recently brought back under the full control of the city council.
The network provides heat and hot water to more than 5,000 homes 120 commercial businesses across the city.
The price rise comes at a time when the vast network of pipes, and its associated systems, needs significant investment.
The costs of this is estimated to be in the region of £17.5m.
Council documents say Enviroenergy has seen increased costs from the wholesale markets for utility supplies, the cost of materials and increased maintenance costs, and therefore the cost of each tariff must go up to match.
During a meeting of the executive on Tuesday (November 22), during which the recommendations were approved, Cllr David Mellen (Lab), the leader of the council, said:
“The increases proposed in this paper will represent a very reasonable and affordable energy cost.”
For those on the most common domestic heat tariffs an extra three and a half pence per day will be applied to the standing charge and one and three quarter pence per kWh on the unit rate.
This represents an overall increase of 22 per cent for the average Enviroenergy customer, with an additional weekly cost of £1.73 per week, matching the equivalent Energy Price Guarantee ‘all-in’ price offered by Government to national domestic gas users.
For domestic electricity tariffs, of which there are 109 customers who occupy apartments at the Atrium building on Waterfront Plaza, there will be an increase to the standing charge by 14p per day and the unit rate by 12p per kWh.
This is a 75 per cent increase, at an additional average weekly cost of £4.70.
Commercial heat and commercial electricity tariffs will also rise in line with inflation, according to the council.
Enviroenergy’s output includes heat which comes from burning waste collected by the council from city homes, preventing it from going to landfill and allowing the authority to generate its own form of heat for the network.
Wayne Bexton, the director of environment and sustainability at the council, added: “There are four categories of increase.
“We have obviously had to take into consideration the Government’s price cap information, we have quickly turned that round from August through to these last few weeks to analyse that and make sure those increases are in line and doesn’t push us over either that boundary or the potential restriction on renewable generators, which we are classed as and are also coming in through the latest budget.
“Domestic heat tariff increases of 22 per cent, which equates to an average household of around £86 per year.
“Across the board we are looking at those increases to manage our costs obviously for delivering that heat and power, but also to mitigate against some of those inflationary increases.
“It is still below what residents would be paying for gas.”
Cllr Andrew Rule (Con), who represents Clifton West, said: “How much forward warning has been given to residential customers that this is happening so that they can take it into account?”
Mr Bexton replied to say a newsletter has been sent out to customers and a 30 day notice will also be served before the proposals are implemented on January 1, 2023.
A six month review will take place to review fuel voucher requests from customers on the district heating network, to see if there is an increase of fuel voucher requests after the price rise is implemented.