An energy company owned by Sutton Coucnil has defended a huge 25 per cent rise in its prices.

The move has been slammed as “unwarranted and unfounded” by a local councillor who is also a customer of the Sutton Decentralised Energy Network (SDEN).

It was set up in 2016 and provides hot water and heating to homes in the New Mill Quarter development in Hackbridge. Over the past few years, residents have faced dozens of outages which have left them without heating and hot water.

In a letter sent to the council, Councillor Sheldon Vestey said: “I am reaching out to outline my shock and concern as Sutton Council has opted to increase heating costs by 25pc in the unit charge alone for a large chunk of the population in my ward.

“This jump in pricing is completely unwarranted and unfounded based on the pricing model set out by SDEN.”

SDEN has defended the rise saying it is “extremely competitive” compared to traditional boiler systems claiming it is 38pc cheaper.

Homes supplied by SDEN do not have their own boiler and instead have radiators fueled from “off-site heat sources”. The aim was to connect the system to the incinerator in Beddington but work to make this happen has still not been completed.

Cllr Vestey added he thinks Sutton Council has used “misleading practices” by not including VAT in the new pricing sent out to customers.

He said: “Customers are rightly confused to see old pricing including VAT and new pricing without VAT and it is clear that this move has been done to somewhat mask the full extent of the price increase.

“Consumers have no way to leave this business or access alternate heating as the council continues to authorise higher and higher standing charge levies without justification and imposes unit charge increases above and beyond the rest of the market.”

A spokesperson for SDEN defended the new pricing claiming from April 2023 customers would pay on average £741 a year which it claims is a 12pc increase on the year before and 38pc cheaper than the average household.

The spokesperson said: “SDENs prices are extremely competitive compared to using a domestic gas boiler system. We have been able to protect our customers from large price increases due to the connection to the Beddington landfill gas site with a small reliance on wholesale gas.

“Like most companies, we have to ensure our financial viability and as the cost of wholesale gas is still relatively higher than in previous years these costs have been taken into consideration and have been reflected in our customers’ bills.

“The unit price has increased by 25 per cent but as stated above, based on the average usage of an SDEN customer their bill will only increase by 12%. Like many other companies we present our bills with the unit tariff and usage at the top of the bill and then the final figure at the bottom includes VAT. “