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Decision details
Electricity Contract Renewal (smaller School sites)
Decision Maker: Executive Director: Growth and Regeneration
Decision status: Recommendations Approved
Is Key decision?: Yes
Is subject to call in?: No
Purpose:
There is a clear and pressing need to maintain
compliant contracts for heat and power to supply council buildings,
housing, and schools
Failure to make arrangements before the current contract expires on
31/12/21 would mean the council pays off-contract rates until a new
contract is in place. These rates are up to 100% more
expensive
Decision:
•The decision is to re-tender the
electricity contract set out below to 31/3/22.
•An Officer Executive Decision was taken in October 2021 to
extend the contracts for 3 months.
•Energy contract renewals are ordinarily made under delegated
authority following a December 2020 Cabinet Key Decision but cannot
be accomplished within the estimated budget due to the current very
high prices. Wholesale energy prices are currently at unprecedented
levels which are placing significant pressure on council
budgets
•The contract must be re-let by 31/12/21 to avoid defaulting
to off-contract prices however due to the way that the energy
market is structured, a decision is needed by the xx December. As
this decision is not within the delegated Authority of the
Executive Director, and as a key decision is needed before the date
of the next Cabinet meeting in January there is a clear and
pressing need for the decision to be taken by the Executive
director as a key decision in line with the provisions of the
constitution.
•The contract is for three months (ending 31/3/22) as
alternative procurement strategies are currently being
developed.
•Legal and Procurement services have confirmed it will not be
possible to have new electricity contractual arrangement in place
by 31/12/21.
•A strategy of three-month rolling extensions or re-tenders
has been agreed at the Corporate Leadership Board meeting on
21/12/21, to avoid locking in prices at high levels for any longer
than necessary.
Alternative options considered:
Option 1 - Seek approval at January Cabinet
before re-contracting. Rejected as this would incur additional
costs estimated at £97K because the council would default to
off-contract rates for at least one month, which are up to 100%
more expensive
Option 2 - Run competitive tenders for longer contracts: rejected
as this would commit the council to prices at or near the peak of
the market, for an extended period.
Option 3 -
Publication date: 10/01/2022
Date of decision: 07/01/2022