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The Future of Municipal Energy Supply 14/10/2016

Nottingham City Council has launcehd Robin Hood Energy, the first local authority owned gas and electricity supplier on the market.

 

What does it mean for councils and tenants?

 

As fuel poverty increases across the UK one of the solutions proposed has been publically owned energy supply. However, is this possible and sustainable?

 

The answer came in September 2015 when Robin Hood Energy became the first local authority owned, gas and electricity supplier on the market. This ground breaking move was carried out by Nottingham City Council, who after a series of consultations, concluded that the most effective way to tackle fuel poverty was to set up its own energy supply company.

 

While Nottingham City Council has been involved in the energy market for many decades, including operating the UK's largest district heat and power scheme, Robin Hood Energy represents a significant long-term investment. It has allowed the council to use its existing expertise to enter the licenced gas and electricity market and re-shape the boundaries of what municipal energy supply means.

 

Robin Hood Energy's mission is to tackle fuel poverty by offering affordable gas and electricity. It takes a socially motivated approach to its business activities and maintains a low cost base by operating as a not-for-profit company with no superfluous expenses such as directors bonuses or paid shareholders.

 

Their commitment to reducing fuel poverty was demonstrated in November 2015 when it released the UK's first competitively priced gas and electricity prepayment tariff. Prepayment customers, or Pay-As-You Go customers as they're more commonly referred to, are traditionally the most vulnerable and likely to be fuel poor. Pay-As-You-Go meters do incur some extra administrative costs to run, however these costs do not justify the often exorbitant tariffs charged by big energy companies to low income, struggling meter users. Up until November 2015 there had been no competitively priced prepayment tariffs available on the market and it was Robin Hood Energy's first priority from launch to begin redressing this imbalance.

 

Robin Hood Energy has already recognised the benefits delivered by smart meter technology and, as of August 2016, began rolling out Pay-As-You-Go smart meters to prepayment customers who benefit the most from further energy savings, control and increased payment options. The efficiencies delivered by smart meters bring down running costs which ultimately results in a reduction of tariffs for customers.

 

The company recently extended its smart meter mandate and is rolling out Pay-As-You-Go smart meters as standard for social housing voids with existing prepayment meters. Local authorities already in partnership with Robin Hood Energy are now benefiting from the installation of smart meters in their housing stock.

 

Their smart meter offering is based around void and vacant properties and involves local authority landlords switching these to Robin Hood Energy's supply during the void period. A great deal of attention has been given to developing a slick switching process for voids to ensure that the lettings team's resources are used as efficiently as possible. The voids process, developed with other partners from the social housing sector, offers the lowest possible administrative burden to the organisations involved and includes a financial incentive by way of waived standing charges.

 

During the void period Robin Hood Energy engineers install dual fuel smart meters in void properties so that when a new tenant moves in the property will be on an affordable tariff as opposed to an expensive, variable tariff generally offered as default by large energy companies. It can often be months before a new tenant realises they have been paying an expensive default tariff making it likely they will move into a situation of fuel debt, something the company is determined to prevent. Residents on a Robin Hood tariff retain the right to switch away, however the prices and excellent customer service make this unlikely.

 

Robin Hood Energy is leading a growing movement of council run energy suppliers who are determined to put the needs of the energy consumer back at the heart of energy supply.

 

Benefits to Local Authority Landlords


  • Traditional pre-payment meters are replaced with smart meters which reduces administrative time spent wiping debt and topping up.
  • There are no standing charges applied during the void period (up to 40 days).
  • An annual retention payment is available for customers who remain supplied by Robin Hood Energy.
  • Dedicated, easy to contact account administrators manage the void switching process.
  • Affordable energy bills for tenants reduces the chances of them becoming fuel poor.
  • Tenants who move out of fuel poverty can spend their income locally which supports the local economy and infrastructure. 

 

Benefits to tenants


  • Smart meter installations allow tenants to manage their energy use efficiently and offer more flexible top up methods for those who struggle to leave their property.
  • Monthly billing for credit customers negates the risk of lump sum, quarterly billing that can leave a tenant in debt.
  • Friendly Disconnect meaning if a customer runs out of credit outside of office hours they won't be disconnected until opening hours recommence.
  • The company pursues an ethical debt management process that, where possible, assists tenant to pay off the debt to us without involving bailiffs.
  • Robin Hood Energy operate a Priority Service Register that includes a number of options to ensure the most vulnerable tenants are supported.
  • A Freephone contact number connects customers to a dedicated customer service centre whose advisors are trained in energy efficiency advice as well as account administration.  

 

APSE Energy is working alongside Nottingham City Council and Robin Hood Energy to promote the benefits they can bring to those local authorities who wish to work with them.

 

Any ARCH member wanting to learn more about Robin Hood Energy can contact Phil Brennan, Head of APSE Energy at pbrennan@apse.org.uk or on 0161 772 1810. 

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