Decision details

The Council’s Electricity Supply Contract expires 31 March 2019. This report seeks delegated authority to:

1.    Re- procure the Councils Electricity Supply Contract via a Central Purchasing Body (CPB)

2.    To grant delegated authority to Director of Finance and Commercial Services or his/her nominated deputy to award a contract for this procurement.

That the Executive Director:

(i)            approves the Council to call off from the new Yorkshire Purchasing Organisation (YPO) framework and enter into a new 4-year electricity contract with Npower with effect from 1st April 2019 on the basis set out in the report; 

(ii)          approves the Council to purchase green electricity under the new electricity contract in order to achieve its objective within the Green City Strategy and support the Council’s role in addressing carbon reduction targets in Sheffield;

(iii)         delegates authority to the Director of Finance and Commercial Services (or the equivalent grade officer) in consultation with the Director of Legal and Governance,

a.    to decide the procurement strategy for and the award of the new contract;

b.    to enter into negotiations with YPO/new supplier and agree the terms of the new contract;  and

c.    to take all other necessary steps not covered by existing delegations to achieve the outcomes outlined in this report.

The Council do not currently have expertise in energy market trading therefore contracting through a Central Purchasing Body (CPB) offers the Council the best value procurement route.

Following an evaluation of the currently available CPB frameworks the Yorkshire Purchasing Organisation CPB is considered to offer the best route for purchasing the Council’s electricity supply

Remaining with the same supplier will ensure continuity of supply and avoids a lot of administration work for meter or data transfer required for a new supplier.

Option 1 – the Council to procure directly from a utility company.  This option is not recommended because:

·         the Council do not currently have expertise/sufficient resource and knowledge to manage energy purchases, including the provision of ongoing monitoring of energy markets relies on experienced officers going to the market at the right time on the right day.   In any event, if the Council wishes to procure directly from a utility company, an open tendering process will be required in order to comply with the Public Contracts Regulations.  As the existing electricity supply contract is due to expire by the end of March, the Council will not have sufficient time to complete a full tendering process and put a new contract in place before April 2019.

Option 2 – the Council to purchase via an Energy Broker.  This option is not recommended because:

·         an energy broker often buys significantly smaller amounts than Central Purchasing Bodies and cannot secure the same economies of scale, potentially operating at greater risk if providing low prices.  In any event, it requires a full procurement process and the Council will not have enough time to implement that in order to put a new contract in place before the existing contract expires.