The boss of an energy company has defended its decision to TRIPLE prices leaving residents in the city centre 'freezing or homeless.'
Earlier this week, the Manchester Evening News reported on the plight of people living in the CHIPS building in New Islington.
The nine-storey block which was opened by developer Urban Splash in 2009 has an eco-friendly heating system designed to generate electricity while capturing heat made in the process.
It means all residents operate off the same boiler and are therefore locked in with the same energy supplier.
When their previous supplier CNG Energy went bust in November, a company called Pozitive Energy was appointed by the regulator Ofgem to take over.
In a letter sent by Switch2, the company which manages billing for the CHIPS building, residents were told the rates provided by Pozitive were 'not as competitive' as their current rate.
The rate for heating went from £0.07683 per kwh to £0.27973 while the electricity rate and standing charges also increased.
New bills were sent to CHIPS residents just days before Christmas with one resident seeing theirs soar from £56.29 in August 2021 to £152.63 in December, another went from £42.02 to £215.29 and another from £66.70 to £260.56.
The letters have left residents worrying about how to pay their bills, with many now too afraid to turn on the heating or even have a hot shower.
Jeff Swales, 35, said: "I don't think they appreciate the effect that letter has had just before Christmas - it was devastating.
"There was one woman who's got a £300 bill, she was sat in the lobby in tears saying 'I don't know how I'm going to pay'.
"I took out a payday loan to cover it and now I'm moving out.
"I'm going to sleep on a friend's sofa."
Now Steve Daniels, Chief Strategy Officer of Pozitive Energy, has spoken to the M.E.N about the situation.
"I've got massive sympathy," he said.
"I really do. But there's not really a great deal we can do - we inherited this."
Like the now-defunct CNG, Pozitive is primarily a commercial energy supplier meaning most of its customers are places like hotels, schools and restaurants.
Ofgem appointed Pozitive in a process known as a Supplier of Last Resort (SOLR).
"People have got to remember we are a B2B supplier, not a residential supplier," he said.
"We don't have a price cap. "
Asked to explain why Pozitive's rates are so high, Mr Daniels said when CNG went into administration it did not have any pre-bought gas - a strategy known as 'hedging' which protects suppliers from volatile prices.
Pozitive is therefore having to buy gas for former CNG customers at 'demand' rates which are soaring due to a combination of factors such as political instability in Russia.
"This is the real issue," he added.
"We have to purchase at today's market rate.
"We were aware CNG came without any hedges, that forward purchase had all gone.
"I hear people saying 'I can't believe you've put prices up, that's disgusting', it's nothing to do with us."
A number of tenants moved into the CHIPS building on a Rent to Buy scheme which means eligible renters pay 80pc of market rate so they can save 20pc towards a future deposit.
But tenants say the energy price hike means that no longer makes financial sense.
Luke Ives, 30, said: "That 20 per cent isn't going towards a mortgage, it's going towards energy bills.
"People are leaving because it's unaffordable."
"It's news to residents that we have a commercial supplier and we'd like to know why," he added.
Mr Daniels said Pozitive, which is based in Colchester, Essex, went through a 'stringent' tendering process to be appointed by Ofgem and that the company has tried to support CNG customer as best as it can.
He said Pozitive went 'beyond the requirements' by agreeing to honour credit balances - a decision which he says has cost millions of pounds.
And Pozitive is now asking all CNG customers if they will go onto a 'contract rate' so they can protect themselves from any further prices hikes.
"We're seen as the bad guys, it's not that at all," Mr Daniels said.
"We've tried our absolute hardest.
"If any customer is struggling and needs assistance we're there to talk with them and help whenever we can."
Urban Splash, RMG, Switch2 declined to offer further comment and referred the M.E.N to statements issued on Monday.
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What Switch2 says:
A spokesperson said: "Switch2 Energy is the billing service provider for the Chips scheme and is not responsible for the operation and maintenance. Therefore, we can only comment on the metering and billing and why the tariff has increased.
"Switch2 provides billing services for New Islington Utilities. The energy supplier for the site, CNG, went into administration in November and Ofgem allocated a Supplier of Last Resort to step in.
"The new tariff reflects the market increases experienced over the last 12 months, which have seen the wholesale gas price increase 5-fold since January 2021.
"In line with every other domestic consumer who will be, or currently are, facing a significant price increase, the charges for heating and energy will be rising at Chips.
"We understand the annual energy bill for gas and electricity at Chips to be going up by 47%.
"Generally, the bills customers receive include a heat unit charge based on their meter readings.
"This covers the cost of gas and electricity used in the communal heating system plant room. There is also a daily standing charge. This covers the cost of maintaining and repairing the plant (boilers, pumps, distribution pipe work, meters and heat interface units) and billing activities."
What RMG says:
Justin Herbert, Operations Director, said: "RMG are the managing agents for the building with responsibility for the common areas.
"There has been historic problems with the boiler system at CHIPs but the developer provided an additional boiler in 2017 at no cost to the leaseholders and since then the boiler system has not failed for more than 24 hours. The last failure was in October 2021 but this was addressed on the day.
"The Communal Heating System at Chips is complex. Communal boilers heat the hot water and the water pumps, pump the hot water around the building.
"RMG currently maintain the communal parts of the heating system.
"This includes the boilers and the infrastructure that delivers the hot water around the building. Inside each apartment, there is a HIU.
"This allows residents to alter their heating and water temperature from the point it enters the apartment.
"From the HIU onwards, all equipment is the owners responsibility so a number of owners have had issues with this element of the system that requires regular servicing.
"This includes all pipe work, meters, radiators and the HIU inside the apartment.
"There are currently no known faults with the communal system and both boilers are working efficiently.
"RMG have no involvement in the procurement or placement of utilities contracts or the billing but sympathise with the increased costs the residents at CHIPs and across the country are now facing."
What Urban Splash says:
Urban Splash declined to comment.
However, the M.E.N understands Urban Splash are looking to procure an alternative supplier for the CHIPS building.
A review of the heat network is also due to be carried out, it is understood.
