Decision Maker: Cabinet
Decision status: Recommendations Approved
Is Key decision?: Yes
Is subject to call in?: No
Renewal of electricity contract for Council
Councillor Peter Butlin (Deputy Leader and Portfolio Holder for Finance and Property) set out the rationale behind the report, explaining that approval was sought to enter into a framework agreement for electricity for Council owned buildings through the East Shires Purchasing Organisation (ESPO) for four years from October 2024, with an estimated value over the life of the contract of £6.2m. The proposed framework would supply 100 existing buildings, at current annual consumption of around £1.2m (although it was anticipated prices would rise by 30-35% before the new framework was put in place). This was only a proportion of the total £5m electricity spend with the remaining usage contracted separately.
ESPO had demonstrated over many years that it’s specialist buying expertise in the energy market and collective buying power within the energy market from its many customers, provided the skills and scale to negotiate longer term deals that offered value for money for the Council. This was particularly important as wholesale prices had increased by 295% in the previous two years, compared to an increase of 120% under the existing ESPO contract.
Councillor Martin Watson asked whether there was any obstacle to aligning the framework with the street lighting contract and Councillor Butlin confirmed that this contract represented a portion of the Council’s total energy usage and he would look into how the Council’s purchasing power could be utilised further.
1. Agrees to the Council entering a framework agreement (the (Electricity Procurement Service Agreement) for the purchase of electricity for council owned buildings with ESPO (East Shires Purchasing Organisation) for the period Oct 2024 - Sept 2028.
2. Authorises the Strategic Director for Resources, in consultation with the Portfolio Holder for Finance and Property, to enter all required agreements to implement the recommendations in this report on terms and conditions considered acceptable to him.
Report author: Rebecca Couch
Publication date: 17/03/2023
Date of decision: 16/03/2023
Decided at meeting: 16/03/2023 - Cabinet