A new Barnsley based energy tariff could be introduced to make fairly priced domestic fuel available to all residents under a scheme devised by the council to try to reduce the town’s problems with ‘fuel poverty’.
If council chiefs approve the idea when they meet next week, the council will start talks with energy providers to find a candidate willing to provide affordable electricity and gas to anyone in the borough who wants to sign up.
It is estimated that if around 1,900 people sign up to the scheme in the first year, there is potential for an overall saving of more than £576,000.
Over five years that figure would be expected to grow to more than 13,000 customers using the tariff, making savings of around £4m.
Similar arrangements have been used before in other parts of the country and are known as ‘white label’ arrangements, but they have been restricted to those affected by fuel poverty, a measure generally dictated by households needing to spend more than ten per cent of their income on energy costs.
Barnsley Council want to introduce a scheme which would help those households but which would also be available to any households in the borough, along with small business customers.
Although the primary aim is to make fuel available at an attractive rate, it is accepted that it will be impractical to demand the cheapest price from suppliers.
It is expected the council could end up generating an income from the arrangement, with any money made expected to go back into the costs of printing promotional material for the scheme and also to provide grants for energy related work.
Research suggests the cheapest deals are from suppliers which often lack good customer service skills, something the council would insist upon to protect the integrity of its own reputation.
So they want to find a supplier with prices which leave them consistently among the country’s top 20 for value.
If the scheme is adopted, it could also mean residents who have pay-by-use meters installed having them removed if they were not wanted, because the council would write that stipulation into the contract.
Any ‘introductory’ deal, where customers were later switched to a more expensive tariff would also be ruled out by the council, in order to help protect residents from unexpected price rises in the future.
The best deals can be negotiated where high customer numbers are involved and it is accepted by the council that they do not know how popular such a deal would be – nationally there are many customers who have stayed with their original suppliers despite the market expanding greatly in recent years.
As a result, the could would automatically include any empty council houses into the scheme and Berneslai Homes, the management company which looks after the council’s stock of housing, is also co-operating with the project.
A report to the cabinet states: “Although it would be ideal to partner with a supplier who can always deliver the cheapest tariffs, this isn’t possible because of the volatility of the market and the increasing number of suppliers involved.
“Quite often the cheapest tariffs come from suppliers with a poor level of customer service. Instead, the Council will expect that the supplier provide a consistently competitive tariff so that the offer appears within the top 20 available on switching websites on a regular basis.
“The supplier will also be expected to maintain the tariff and not move residents to a more expensive variable tariff following an introductory period and this requirement forms part of the service specification.
“There is potential to generate an income from the energy tariff, and this would be welcomed as a means of recouping any costs associated with printing promotional material initially.
“The remainder would be placed in the Energise Barnsley Community Fund for redistribution in the form of grants to other agencies in the Borough to support projects tackling fuel poverty.
“A domestic energy tariff will help residents to save money on their energy bills, particularly those people who have never switched suppliers or who don’t switch suppliers on a regular basis.
“By reducing the cost of energy, some residents may be lifted out of fuel poverty. It will also prevent other residents from falling in to fuel poverty.”
The move represents a switch in tactics from the council, which has historically focused its attention on helping people out of fuel poverty by improving energy efficiency in their homes.
However, rising fuel costs mean the savings made through those measures have been shown to be short-lived and this approach is meant to tackle the issue at its source, the price customers pay for the fuel they use.
It is intended that any scheme negotiated by the council would last for five years in the first instance.