Decision details

Council contract with LASER energy for the supply of Gas and Electricity

Decision Maker: Leader of the Council and Lead Councillor for Housing

Decision status: Recommendations Approved

Is Key decision?: Yes

Is subject to call in?: No

Purpose:

Our incumbent LASER energy, currently procures energy for over 200 public bodies in the UK, collectively purchasing over £1.5 billion of gas, electricity, and water in 2022 on behalf of 8,500 end users.  LASER have offered the Council an opportunity to join its flexible pricing framework, as long as the Council enter into contracts with LASER before the end of June.  

 

If the Council does not contract with LASER there are limited procurement options available due to time taken to switch suppliers.  It is likely that the Council will see costs rise and be exposed to volatility on the energy markets when trying to procure energy at spot rates. 

 

Decision:

1.       Award a contract for the supply of Electricity to the Council via the LASER consortium, for a two-year contract with the option to extend for one further year, worth up to £9,000,000 in total for 3 years. This will be to the top ranked supplier on the Electricity framework – Npower.

 

2.       Award of a contract for the supply of Gas to the Council via the LASER consortium, for a two-year contract with the option to extend for one further year, worth up to £2,655,000 in total for three years. This will be to the top ranked supplier on the Gas framework – Total Energies.

 

3.       Delegate authority to the Strategic Director of Place to enter into contractual arrangements on behalf of the Council, in consultation with the Legal Services Manager.

 

4.       The prices above are consistent with the prices we currently pay and have been budgeted for. There will therefore be no impact on the current budget expectation.

 

Reasons for the decision:

1.     The rates secured by LASER have been competitively purchased in the market and reduce the risk of the Council having to make spot purchases at inflated costs (as seen in 2022).

2.     The alternative of trying to switch energy suppliers is too late at this point to be considered viable without exposing the Council to significant price changes.

3.     The Council does not have the necessary expertise or resources in energy to procure its own utilities.

4.     The alternative would be to purchase energy at spot prices. The projected energy costs for the year from October for the Council under this option will be £4.75m (increase of £800k pa).

Alternative options considered:

1.     To award two contracts for gas and electricity via the LASER framework to their top ranked suppliers, Npower and Total Energies

2.     To do nothing and procure energy on the spot market.

Interests and Nature of Interests Declared:

None.

Source of Authority to take Decision:

Council’s Constitution, Part 3: Responsibility for Functions, Leader of the Council.

 

Publication date: 28/06/2024

Date of decision: 28/06/2024

Accompanying Documents: