Swindon Borough Council An Approach to Procuring Energy Clive Wilce Energy Manager

Familiar With This?

SBC – Usual in house practice Update data including msn,mpr,aqa,etc Update data including msn,mpr,aqa,etc Tender preparation Tender preparation Internal clearances, procedures and permissions Internal clearances, procedures and permissions OJEU OJEU Tender Tender Analysis & award contract Analysis & award contract

Tender annually/bi-annually - is this cost effective? All the former preparations All the former preparations If a new Supplier/s – re-register the properties for VAT If a new Supplier/s – re-register the properties for VAT Finalising contract with outgoing Supplier Finalising contract with outgoing Supplier Transferring supplies to new Supplier Transferring supplies to new Supplier Agreeing reads between outgoing and incoming Supplier - simple?!!!! Agreeing reads between outgoing and incoming Supplier - simple?!!!!

Is there a Better Way? I think so

Advantages of longer term contract/s Avoidance of: Updating all the data Updating all the data Tender preparation Tender preparation Internal procedures and permissions Internal procedures and permissions OJEU OJEU VAT re-registration VAT re-registration Finalising contract with outgoing Supplier Finalising contract with outgoing Supplier

Advantages of longer term contract/s contd Transferring supplies to new Supplier Transferring supplies to new Supplier Agreeing reads and the administration that is attributed to this process Agreeing reads and the administration that is attributed to this processAdvantages: Likelihood of negotiating better terms & conditions Likelihood of negotiating better terms & conditions Better service (more customer focused) Better service (more customer focused) Time to establish billing systems to suit your own organisation Time to establish billing systems to suit your own organisation

Advantages of longer term contract/s contd Less likely to have delays in site works and meter connections Less likely to have delays in site works and meter connections

Disadvantages I cannot think of any I cannot think of any Can you? Can you?

How do you achieve this with transparency? Encourage Suppliers to submit a forward pricing methodology Encourage Suppliers to submit a forward pricing methodology Make clear that you are looking for openness and transparency Make clear that you are looking for openness and transparency Allow at least 3 months in contract particulars to negotiate and finalise Allow at least 3 months in contract particulars to negotiate and finalise

How was this achieved for GAS? Agree at the outset non-gas costs Agree at the outset non-gas costs Agree that the supplier provides regular independent reports Agree that the supplier provides regular independent reports Work in partnership with the supplier to achieve the best possible result Work in partnership with the supplier to achieve the best possible result 350 days to lock into a price 350 days to lock into a price Trust is required on both sides of the relationship Trust is required on both sides of the relationship

How was this achieved for Electricity? Pricing formulae agreed at the outset linked to market indices Pricing formulae agreed at the outset linked to market indices Regular independent market reports provided Regular independent market reports provided Work in partnership with your supplier to achieve the best possible deal Work in partnership with your supplier to achieve the best possible deal 350 days to determine when to buy 350 days to determine when to buy Trust is required on both sides of the relationship Trust is required on both sides of the relationship

Identified savings for gas New billing arrangements have saved around £35k New billing arrangements have saved around £35k Savings attributed to officer time estimated to be £20k Savings attributed to officer time estimated to be £20k Savings attributed to longer term contract £59k (Non-gas costs reduced by this amount in year 2) Savings attributed to longer term contract £59k (Non-gas costs reduced by this amount in year 2) Cost avoidance of £155k Cost avoidance of £155k

Identified savings for electricity Sub-100kW £45k when compared with the standard pricing arrangement Sub-100kW £45k when compared with the standard pricing arrangement New billing arrangements £20k New billing arrangements £20k Officer time £15K Officer time £15K All savings have not been fully identified like for example cost avoidance All savings have not been fully identified like for example cost avoidance

Any Questions?