Heat network operator vs supplier: who is responsible?

The operator

The regulations say a person operates a heat network if they control the transfer of thermal energy on it for supplying heating, cooling or hot water. Ofgem's registration guidance adds that the operator is expected to have substantial control over key decisions about the network's long-term reliability, efficiency and compliance.

If more than one organisation could be the operator, the regulations look at who is entitled to make decisions about modifying the network. If different organisations can make those decisions for different parts, each operates its own part.

The supplier

Ofgem's registration guidance says an organisation supplies heat where it is responsible for the commercial arrangements with customers. These include setting charges, issuing bills, providing customer service and handling complaints.

Leasehold blocks

Ofgem says that in the leasehold sector the operator is typically the freeholder, because the freeholder generally keeps overall responsibility for the management and operation of the building's communal system.

Where there is a right to manage (RTM) company or a residents' management company (RMC), Ofgem says the operator may differ and may shift to the RTM or RMC. It says it is important to consider the specific management structure in each case.

These are common set-ups. Always check your lease, your management agreements and any energy contracts:

• The freeholder runs the heating and recovers the cost through the service charge: the freeholder is likely to be both operator and supplier.
• An RMC that owns the freehold, or manages the building under the leases, runs the heating and bills for it: the RMC is likely to be both.
• An RTM company has taken over management, including the heating: the role may have shifted to the RTM company.
• An energy services company runs the plant or bills residents under a contract: it may be the operator, the supplier or both. Check the contract.
• A managing agent runs things day to day for the freeholder or company: the agent usually acts for the organisation that holds the role, rather than holding it itself.

More than one operator

Where several organisations operate parts of a network, Ofgem expects them to use reasonable endeavours to agree a nominated operator. The nominated operator is the contact point with Ofgem and passes on information to the others, but it does not take on regulatory liability for them.

What each role must do

Section A of the authorisation conditions applies to every authorised person. Section B applies to suppliers and covers most of the consumer protections, such as complaints, billing information and the Priority Services Register. Section C applies to operators and covers standards of conduct and security of supply. See all 29 authorisation conditions.

Questions

Can one organisation be both operator and supplier?

Yes, and it is common in blocks of flats. That organisation must meet the obligations of both roles.

Is our managing agent the operator?

Usually not. A managing agent normally acts for the freeholder or company that holds the role. If an agent or energy company controls the network or bills residents in its own right under a contract, check that contract.

We're an RMC but don't own the freehold. Are we the operator?

It depends on who controls the heating and makes the key decisions under your lease and management arrangements. Ofgem says the role may shift to an RMC, so look at the specific structure, and take advice if it's unclear.

Sources

• The Heat Networks (Market Framework) (Great Britain) Regulations 2025, regulation 13
• Ofgem: Heat networks registration guidance (January 2026)
• Ofgem: Heat networks regulation authorisation conditions

Related guides