Managing Energy | Key Benefits
10 reasons why you should choose ESPO Fully UK compliant - no requirement for additional quotes as ESPO have run the tender process for you. Accredited to the Government Energy Project’s “best practice” standard and is recommended by the Cabinet Office for use by public sector organisations. Flexible, aggregated, low risk management approach. Proven track record in purchasing below the market average. Dedicated Energy Customer Service team.
Free SECR reporting for multiple academy trusts. Transparent ESPO fees (no hidden charges on the kWh). Contract based on a fixed supplier margin for contract length. Supplier(s) stability and longevity form part of tender process. Aggregation of all customers usage provides better buying power.
Overview of ESPO ESPO is a major purchaser with over 40 years experience of purchasing energy, including gas, electricity, heating and automotive fuels, and LPG on behalf of over 21,000 local authority, housing associations, public and charitable sector customers amounting to a total annual expenditure in excess of £250m. ESPO is also very active in managing and influencing the energy supply chain both through direct contact with the various industry Regulators, Government Departments, Parliamentary Committees and key organisations such as National Grid, OFGEM, and through active participation in consumer groups.
Frameworks The gas and half hourly and non half hourly electricity are fully compliant frameworks. ESPO have carried out a full tender process using compliant scoring methodology. The contracts are based on fully transparent pricing in which the supplier margin is fixed for the duration. Metering and network charges are also fixed periodically based on a pass through of the regulated network operator charges. The contract provides flexibility in setting the price of energy within a long-term hedging strategy on behalf of 55 local authorities and other public sector organisations covering some 28,000 supply points taking gas, and electricity. A customer can include additional meters onto the framework at any anytime this ensures customers contract end dates align and complte portfolio is under one agreement.
How we purchase Energy is purchased in the wholesale market according to a price risk management strategy based on a forward cover plan reflecting the risk appetite of our customer base. Effectiveness of the risk strategy and our performance is reviewed by a stakeholder governance panel comprising key stakeholders. Flexible contracts of this nature require very large volumes to operate effectively. By aggregating these volumes into a single supply with one supplier, significant economies of scale are achieved resulting in reduced suppliers’ margins and minmises avoidable costs (non commodity) when compared to average charges for smaller customer portfolios.
Estimated Aggregation Savings*
Gas
Electricity
2.30%
2.30%
*Based on billed data
*The achieved commodity / outturn price is compared to benchmark market price – not conventional “savings” and independently verified by the Governance Panel twice yearly. The performance target is to outperform the benchmark over the longer term.
The emphasis in flexible energy buying is to manage the risk, rather than the actual price, and by spreading the risk over a period of 18-24 months there is a smoothing effect on annual costs avoiding the extreme variations experienced currently and in the past which made budgetary planning so difficult. The period over which the energy is purchased also provides increased budgetary certainty and earlier information about future costs. This strategy has worked extremely well for customers, over the last 5 years, we have purchased electricity at 3.5% below the market average and for gas 5%.
Services available under the frameworks* • Automatic meter read installation • Various Billing Options to suit • Bill Validation • Site works support • Query handling • Change of ownership (COO) • Meter operators contracts
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• DA/DC contracts • Online portal access • Usage and consumption reporting *some of these services may incur additional charges
Rowena Reid Customer Relationship Manager energy@espo.org