“INCREDIBLY volatile” energy prices could cost Slough Borough Council an extra £3million within three years if a new deal is not struck.
Households across the country will soon be facing steep energy bills in the coming year if regulators increase the energy price gap by as much as 50 per cent following the unprecedented rise in wholesale gas prices.
This will have a roll-on effect on the council where it is predicting its cost could increase to £9.56m by three years, which represents an increase of over £3m.
The council procured a one-year contract using energy broker Zenergi in February 2021 but is now looking for a new deal by April in hopes to reduce this pressure as much as possible.
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It is not expected this £3m pressure to be erased completely due to energy market spiking.
Like other local authorities, the council needs to provide electricity and gas to its lighting, heating, community buildings, car parks, EV chargers, street lighting, communal housing blocks, etc.
Senior councillors were presented a document called the corporate energy procurement strategy and contracts (April 2022 – March 2025) for consideration at a cabinet meeting on Monday, January 17.
Speaking at the meeting, Jason Newman, group manager of asset management, said: “We are looking at an energy strategy that is principally focused on cost avoidance.
“We cannot save money on energy going forward in our corporate estate. Realistically speaking, we are trying to mitigate our financial impact as far as we can, and we are developing this strategy in a way that allows us to be as flexible and dynamic as possible.”
The council’s “holy grail” to reduce its financial pressures and £760m borrowing debt is to sell off up to half its £1.2bn worth of assets. The operational costs attached with those buildings could reduce the council’s energy bill by about £1.5m.
The way the council will secure a new provider is to enter an electronic auction, known as a dynamic purchasing system, established by Gwynedd Council where 15 suppliers will bid for Slough Borough Council.
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The winning price bid won’t be the council’s contract price as it is subject to change depending on the market. At the time of signing, the council will then be presented the sum of cash it will need to hand over from April.
The agreement will be managed by commercial energy broker Beondgroup.
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