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Potential Swansea Energy Company - have your say

We want to find out whether local residents and business would consider buying energy at a low cost from a local, people-friendly, not-for-profit company.

The cost of gas and electricity to keep our homes ticking-over seems to keep on going up.

The independent Competition and Markets Authority says that everyone is paying too much for their electricity and gas and that the big six companies are profiting at everyone else's expense.

Now Swansea Council is looking at setting up an Energy Services Company which could help provide solutions to the problem of spiralling energy costs. The aim would be to provide local families and businesses with gas and electricity at continually competitive prices.

In addition it would be possible for the company to use any surplus income to help families cut down energy consumption. The company would keep costs down and any profits would be reinvested in the company.

However, the council will not proceed with exploring the opportunity of setting up an Energy Services Company without finding out if there is an appetite for it among the people of Swansea.

We want your views , so please join in the consultation by clicking on this link.

The deadline for responses is 24 August 2018.

Your responses will be taken into account in a report to Swansea Council's Cabinet, at which Members will decide whether to proceed with further work on this opportunity. 

FAQs

What is an Energy Services Company (ESCO)?
An energy services company is an organisation that buys electricity and gas from energy wholesalers and sells it on to customers who sign-up for the service. Civic energy companies are different to the 'Big Six' energy providers like E.on and SSE because their over-riding objective is to sell energy to domestic users and businesses at the lowest possible prices.

Why is the council thinking about setting up an Energy Services Company?
People are paying too much for their energy. It's pushing some into fuel poverty and there's growing recognition something needs to change. An independent Competition and Markets Authority report confirmed that everyone is paying too much for their electricity and gas and that the big six energy companies are profiting at our expense.

What is the consultation process for?
The council will not set up an ESCO if there is no appetite among the people of Swansea for it. You can join the consultation and have your say here.

How would I benefit from an ESCO?
The council has made no decision yet on setting up an ESCO. We want to find out first whether people are interested in being part of it. If an ESCO was set up and you switched your electricity and gas supply to it from your current provider one of the main benefits would be reduced energy bills over a long period.

Do I have to live in Swansea to sign-up?
No, the company will offer energy supplies to everyone. But Swansea Council intends to offer residents and Swansea-based businesses who sign-up the cheapest 'Swansea Tariff'

Would the council make any money out of an ESCO?
The main purpose of a civic ESCO is to deliver lower energy prices to local residents and businesses. All surpluses would be ploughed back into further energy benefits, such as lower prices or energy efficiency works, or fed into wider public services.

Could the council end up making a loss?
Any venture such as this carries some financial risk. However, the Council intends to establish and operate the ESCO at 'arms-length'. In other words the council would own the company and decide what its priorities were, but the company would operate under its own separate management structure with suitably experienced and qualified personnel to run it.

I've never heard of this before. Has anyone else done this?
There are a small number of civic ESCOs operating in England and more are being set up. You can, for example, take a look at the one that's been running a few years in Nottingham, called 'Robin Hood Energy' at this link.

Would businesses be able to sign-up to the ESCO?
Yes. Businesses have been complaining for a long time that increasing energy costs are eating into their ability to break-even or make a profit. Local small and medium-sized businesses would be able to benefit from lower prices and better customer service as well.

If an ESCO is buying from the same wholesalers as the Big Six, how can it possibly charge less than them and make a surplus - or not go into debt?
The idea is that the company is run with high standards of customer service but with much lower overheads. Also, the company will not be paying dividends to shareholders. Customers should join because they want to make a change, because they trust the Council more than the private companies and they want a service that benefits their families and supports their area.

Apart from lower prices, what else would an ESCO do better than one of the Big Six?
Apart from lower prices, the ESCO will deliver better customer services. But over and above that, a Swansea ESCO would be working hard to help deal with fuel poverty in this area. We would work closely with families and community groups to raise awareness about energy efficiency so householders and businesses could save more money.

Want to know more?

Office of Gas and Electricity Markets (Ofgem) 2016 https://www.ofgem.gov.uk/publications-and-updates/infographic-bills-prices-and-profits

CMA 2016 https://assets.publishing.service.gov.uk/media/5773de34e5274a0da3000113/final-report-energy-market-investigation.pdf

DBEIS energy price statistics https://www.gov.uk/government/statistical-data-sets/annual-domestic-energy-price-statistics and https://www.gov.uk/government/statistical-data-sets/gas-and-electricity-prices-in-the-non-domestic-sector

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