Decision - Corporate Procurement of Energy - 100Kw Energy Contract for 2009-10

To seek approval to put in place a 12-month contract for the supply of electricity from 100% renewal resources.

1.       That the recommendation to place a new 100 kW electricity contract with Eon for 12 months be approved.

2.       That the Director, Finance and Resources be authorised, in consultation with the Cabinet Member, to approve the placement of the contract without delay, ensuring the lowest possible price.

1.       The council’s 100Kw electricity contract supplied from renewable sources is on a fixed offer that expires at the end of September 09. The main grounds for the recommendations that are sought are to allow BHCC to benefit from the best price available, contract from a renewable source and obtain value for money within a volatile market where prices are held for a maximum of 24hrs.

2.       This recommendation is made in the belief that the council remains committed to the procurement of electricity from 100% renewable sources and Eon’s position as the only available supplier. The contract would commence at the current predicted price of approximately £1.1m pa. 

1.       The options researched and analysed by the council’s energy consultant and Energy & Water Manager include Purchasing Solutions, alignment with ESCC and soft market testing through a tendering exercise of the existing contract rates on a “brown” and “green” offer. These options have been benchmarked and compared against the current market conditions and it can be seen that the consultants recommendation to a 12 month contract with Eon on the “green” offer reflects the current market conditions and represents value for money.

2.       Due to the volatile market conditions the council may need to re-assess the requirement for electricity to be supplied from renewable sources if the price rises over the next 12 months become unsustainable and may need to balance out the reduction of carbon emissions against budget requirements and see if there are alternative ways of reducing carbon emissions that may be seen as more cost effective.