Why a Docklands Apartment Complex Is Facing a Runaway Gas Bill

“We are going to the gym to take a shower,” says Hanin Faqin, a young woman in a beige hat and a black coat.

She is stood on Monday evening outside the Custom House Square apartment complex near the IFSC in the Docklands, one of five residents grouped in the dark and drizzle, talking about how they are living in fear of their next gas bill.

Last April, Faqin received a gas bill of €1,000 for two months, she says. At that time her gas rate was 37 cents per kilowatt hour, but since October it has risen again to almost 47 cents.

After that she stopped using the hot water for showers and took out a gym subscription. It was cheaper, she says.

“We are very afraid of the next bill,” says her neighbour, Javier Martinez, standing beside her.

But they can’t switch to a cheaper gas company because the apartment complex has a communal heating system, meaning their entire building is heated using one gas boiler on the ground floor from which the heat is piped around the building.

Each apartment is billed according to what it uses, but the system is complicated and, at the moment, expensive because they pay commercial rates.

“We are stuck with them,” says Faquin, moving her hand in a circle. “It’s like a monopoly.”

A spokesperson for Frontline, the company that administers the heating system, says it sells heat to the apartments but doesn’t profit from the increases in the price of gas.

“The gas is billed to the development at the current rate and by using this along with other factors such as the efficiency of the system, carbon tax and gas capacity charges Frontline works out the heat rate,” says the spokesperson.

The government still needs to intervene to assist households locked into communal heating systems with sky-high bills this winter, say Green Party TD Neasa Hourigan and Sinn Féin TD Ruairí Ó Murchú.

A spokesperson for the Department of the Environment says that the Sustainable Energy Authority of Ireland (SEAI) is working on a pilot feasibility study to assess the potential of transferring these schemes to renewable energy sources.

Sky-High Bills

“It’s not fair that somebody in an apartment in Dublin is paying commercial rates,” says Hourigan, who raised the concerns of residents in Custom House Square in the Dáil in June.

“There is definitely a massive issue,” she says. There are more complexes across Dublin that have the same problem, she says.

While Faquin is readying for a bill set at 47 cents per kilowatt hour, Bord Gáis Energy is currently charging about 14 cents per kilowatt hour to residential customers.

Antonio Maiorino, a resident of Custom House Square, says he wants more information as to how much gas he is using, since he doesn’t have access to his meter.

He shares an apartment in the complex with one other person and they are paying €2,200 per month in rent. They don’t plan on turning on their heating at all this winter, he says.

Martinez, who bought his apartment at Custom House Square last year, says he has been collating data from the bills of other householders in the complex. “There is a lack of transparency from the management company and Frontline,” he says.

One apartment that had previously received gas bills on average of between €100 and €200 for two months, suddenly received a bill for €1,147 in April 2022, says Martinez.

At that time the rate for heat was 37 cent per kilowatt hour, whereas it’s 47 cents per kilowatt hour now, he says.

The price has increased nearly six-fold since November 2021, when it was 8 cents per kilowatt hour, he says.

“There is a lack of transparency on how unit rate price is defined or why it has been changing every couple of months in the last year,” says Martinez.

A spokesperson for Frontline says the company is totally upfront with the owners’ management committee about the way it calculates the cost of providing the heat.

But the methodology is complicated because it includes inefficiencies in the system and charges that some domestic customers don’t receive.

It was all going fine until last year when there were major hikes in the commercial rate for gas. “We cannot change something we cannot control,” says the spokesperson.

Before that commercial rates for gas were cheaper than household rates.

Across Custom House Square there are three buildings, each is getting gas from a different company depending on the best available rate at the time they signed up.

They are powered by Flogas Energy, SSE Airtricity and Energia and Frontline buys at the commercial rate, says the spokesperson.

“The energy provider bills Frontline for the gas used and Frontline calculates the heat rate and passes that bill on to its customers,” says the spokesperson.

Frontline is simply the administrator and has a fairness guarantee in all its contracts which say that it will not profit from the sale of heat, instead it is paid a fixed amount per apartment to manage the communal heating scheme, she says.

“Frontline and another administrator of district heating schemes are getting unfair backlash from unhappy customers receiving big bills,” says the Frontline spokesperson.

But she says Frontline saw this issue coming and has been lobbying the government to introduce a different, lower gas tariff for households on district heating schemes.

“District energy in its current form simply isn’t performing as efficiently as it should,” she says.

What’s the Model?

In other countries, predominantly Nordic countries, where district heating is successful, it’s powered by waste energy, says the Frontline spokesperson.

There have also been plans for this kind of district heating in Dublin, powered by leftover heat generated but not needed by, say, data centres.

It was likely envisaged when Custom House Square was built that it would connect into the Poolbeg waste-to-energy incinerator, she says.

Jason Mc Guire, a PhD researcher at University College Cork studying the district heating model in Denmark, says that the environmental benefits arise when the heating system runs off waste energy, as it does in Denmark.

The Danish schemes are all operated on a non-profit basis. “I think that is where the main change comes in,” he says. Mostly the systems there are communally owned, he says.

There are no rules or regulations published for the operation of district heating systems in Ireland to the best of his knowledge, says Mc Guire.

Ó Murchú, the Sinn Féin TD, is assisting another group of householders in a housing estate in Dundalk called Carlinn Hall, who also have a similar communal heating system, powered by gas and managed by Frontline.

Some of them saw their bills treble last winter, he says.

“In no way, shape or form” does this type of communal heating benefit the environment, says Ó Murchú.

The price of gas is increasing and the district heating system is also inefficient and loses a lot of heat. “This is not exactly what district heating systems are supposed to be,” he says.

What Next?

Ó Murchú says that in the short term the government should introduce legislation to cap the price that these households are charged for gas.

In the medium to long term they need grants to switch to renewable energy sources like geothermal, he says.

“There is an absolute onus on the government to provide two things, short-term mitigation and ensuring that we have grant schemes that can facilitate the transfer to a better source of heat,” he says.

The gas boilers should be replaced with another system that is better both in terms of the cost and the environment, he says.

Communal heating systems in Ireland are problematic at the moment. “In the here and now it is 100 percent a mess there is nothing else you can call it,” he says.

The spokesperson for the Department of the Environment says that “the SEAI has initiated a programme of pilot feasibility studies in relation to the technical potential of moving group heating schemes fuelled by natural gas to a renewable energy source”.

The results of the first of these studies will be available in the new year, she says.

In late September, the government announced €600 in energy credits as part of Budget 2023, for domestic electricity customers.

The department spokesperson didn’t respond directly to queries about whether there are any further plans to help those householders affected by the very high price for heat this winter.

Or whether a statement made by the Minister for the Environment, Green Party TD Eamon Ryan, that households wouldn’t be disconnected from utilities this winter, applies to these households too. She said that those queries should be directed to Gas Networks Ireland.

A spokesperson for Gas Networks Ireland said that it wasn’t anything to do with them. It has “no active role or remit in relation to district heating systems”, they said.

[UPDATE: This article was updated on 10 November at 8.51pm to include a comment from Gas Networks Ireland.]