Brent Cabinet approves 2 year 'Purchase in Advance' energy deal

 

The first meeting of the new Brent Cabinet this morning approved a new Purchase in Advance energy supply contract for energy and gas across the Brent Council estate  including some schools. The contract is for a two year period 2022-24 rather than 4 years and for 22-23 represents a doubling in price compared with 21-22, reflecting the current energy crisis.

 

Cllr Paul Lorber addressed the Cabinet and this is the official record of the decision:

 

Cabinet noted the comments made by Councillor Lorber who had requested to speak at the meeting in respect of the item.  In addressing Cabinet, Councillor Lorber referred to section 3.2 of the report and sought further details on the basis of the decision taken in 2020 to provide for a two rather than four year energy supply period under the procurement framework along with an outline of any associated financial implications given the current and unprecedented increase in wholesale energy costs.

 

In responding to the comments raised, Councillor Mili Patel (as Deputy Leader and Cabinet Member for Finance, Resources & Reform) drew attention to the independent assessment of the Council’s energy procurement policy which had confirmed the proposed re-procurement arrangements remained fit for purpose and achieved prices better than market average as well as offering a range of additional services of value to the Council.  The proposed re-procurement and purchasing approach had also been designed to mitigate against overall market risk whilst also seeking to support the Council’s environmental objectives in considering how best to move towards procuring greener and zero carbon energy.

 

In terms of the overall financial impact (as detailed within section 8 of the report), members were advised of the difficulty in securing fixed term wholesale energy supply costs with the arrangements and approach outlined within the report designed to secure an optimal price for required energy usage and associated services whilst also seeking to mitigate against the risk and minimise significant exposure to further wholesale energy market volatility in the short to medium term.  Members noted the approach outlined also included the potential to avoid significant additional costs on energy contract prices in 2022-23 (on the basis detailed within the exempt appendix to the report).

 

Having considered the comments made and recognised the difficulties in predicting future market volatility at the time the decision was made to agree a two rather than four year energy supply period Cabinet RESOLVED:

 

(1)      To approve the award of a contract for the supply of electricity to NPower Limited for two years from 1^st October 2022 via a call-off from LASER Framework Y18003, and

 

(2)      To approve the award of a contract for the supply of gas to Total Gas and Power for two years from 1^st October 2022 via a call-off from the LASER Framework Y18002, and 

 

(3)      that alternatively to (1) and (2) above, to approve the award of contracts for gas and electricity to the next ranked Suppliers on Lot 1 of each of the Frameworks referred to in section 5 of the report, if NPower Limited or Total Gas and Power cannot, or do not accept the offer of a Council contract. Such award shall be in accordance with the offer and award process described in Section 7 of the report.

 

(4)      To approve the Council’s entry into an amended Access Agreement with Kent County Council referred to in sections 7.11 and 7.12 in the report, to enable its participation and purchase of gas  ...  view the full decision text for item 7.

 

The full Cabinet paper can be found HERE