Decision details

A meeting with our energy brokers took place on Thursday 7th March to discuss and evaluate the tender summer reports for our HH and Gas supply contracts for our housing assets.

The meeting was attended by James Rant, Strategic Bid Director (eEnergy), Jason Newman (Group Manager, Carbon & Sustainability), Pat Hayes (Executive Director, Regeneration, Housing and Environment), Neil Euesden (Director Housing) and Carol Maduka (Strategic Finance Manager, Regeneration, Housing and Environment).

DPS Tender

A tender was issued through accessing the Dynamic Purchasing System (DPS) established by Gwynedd Council for the procurement of electricity and gas and award call-off contracts under the DPS.

HH Supply Contract

Our current energy supply contract is with Centrica Corp and will expire on 31st March 2024. Centrica have declined to retender for this contract.
Shell Energy were the only supplier willing to offer a contract for the HH Supplies. Suppliers are still very selective in where they bid, this is particularly the case with Housing Associations and or Housing Stock, largely due to credit and payment issues being prevalent in this area.
While Shell is the only supplier bidding for the renewal of the two HH supplies, there is still a 14.9% reduction against the current contract prices which equates to saving of £4,578 for the same level of consumption in 24/25.

The energy contract is for two sites, 1-29 Pendeen Court, Tamarisk Way, and 1-30 Brook House, Spackmans Way.

The decision is to enter an HH energy contract with Shell Energy for the period 1st April 2024 – 31st March 2025 to achieve best value.

Gas Supply Contract

Our current gas supply contract is with Corona Energy and will expire on 31st March 2024. Corona Energy have not retendered for the contract.
Three compliant tenders were received from Shell Energy, SEFE Energy and EDF Energy for our gas supply contracts.

EDF energy is the recommended supplier for our gas contracts supply our 12 housing sites in Slough for 12 months starting on 1st April 2024. EDF are offering a 41.7% reduction against the current contract price with Corona Energy and this equates to a saving of £91,589 for the same level of consumption in 24/25.

It should be noted that EDF Energy credit check at the point of signature, eEnergy have requested the contracts to be raised so that we can gain some visibility of any issues signing with EDF as soon as possible.

The decision is to enter a gas energy contract with EDF Energy for the period 1st April 2024 – 31st March 2025 to achieve best value, operational continuity and avoid onboarding issues and costs with a new supplier.

Approve two new energy supply contracts for housing assets:

1) Shell Energy supply contract for Half Hourly housing supply; and

2) EDF Energy supply contract for Gas housing supplies.

There were no other options to be considered for HH supply and therefore the decision is to contract with Shell Energy.

Three compliant tenders were received for the gas supply.
Shell Energy was rejected as it offered the lowest saving at £76,398 so does not present best value.

SEFE Energy offered the slightly higher saving of £91,930 but was rejected due to political, onboarding, operational billing and previous contractual issues with SBC.

EDF Energy offers a saving £91,589 which equates to a saving difference of £341 compared with SEFE Energy.

There are several reasons why the decision is to go with EDF Energy:

Onboarding and Transferring Supplier

EDF Energy is already set up as a supplier with SBC and therefore the onboarding time will be quicker and more efficient and prevents potential delay and issues with transferring to a new gas supplier.
There will be no costs incurred for setting up a new supplier on our finance systems. The additional saving of £341 does not warrant the additional costs of setting up SEFE on our systems and potential delay to onboarding which could incur additional ‘out of contract’ rates from our current provider Corona Energy if we do not complete this transfer by 31st March 2024

Billing Portal.

EDF Energy have a group and individual billing portal which SEFE do not, and which make payment review and queries much more straight forward to issue and resolve.

Political Issues with Russian State-owned gas company

SEFE Formerly Gazprom often comes with quite a bit of scrutiny still; Gazprom are a Russian state-owned gas company.

Previous Contractual Issues and Objections

Gazprom objected to the change of gas supplier to Corona Energy in late March 2022, it took 5 weeks to remove the objections based on unpaid bills, at this time Gazprom charged the Council out of contract rates at 19.32p/kWh in April 2022 compared to Corona gas contract rate in May 2022 of 4.69p/kWh. The Council and the PFI school gas bill increase by more than £70,000. The objections were unreasonable the billing payments took 5 weeks to resolve.

Legal

On 17 January 2022 cabinet delegated authority to the Executive Director of Place and Community (now the Executive Director of Regeneration, Housing and Environment) to:

i. access the Dynamic Purchasing System (DPS) established by Gwynedd Council for the procurement of electricity and gas and award call-off contracts under the DPS;
and

ii. to enter into a consultancy agreement with Beyond (eEnergy) to facilitate the management of energy contracts under the DPS as required
by the access agreement to that DPS.

The Gwynedd DPS was procured in compliance with public procurement rules and the Council is identified as a call off party. Therefore, the Council’s appointment of eEnergy and subsequent purchase of its energy requirements under these arrangements is fully compliant with the Public Contracts Regulations 2015 and the Council’s Contract Procedure Rules.

Financial

The reason for the purchasing decision is:
To achieve the best value for energy costs and maintain budgetary control. An estimate energy cost saving of £96,167 will be achieved by entering into these two supply contracts.