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CONSORTIUM AIMS TO BE BIG FUEL SUPPLIER

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Councils across the country could become major players in the deregulated gas and electricity market, ensuring that...
Councils across the country could become major players in the deregulated gas and electricity market, ensuring that disadvantaged residents benefit from cheaper fuel prices and improved energy efficiency.

The process of breaking up the British Gas supply monopoly began in the south-west two years ago, with deregulation due to hit Scotland in the next few months and the rest of the UK thereafter. Electricity deregulation will follow shortly.

A consortium comprising the 19 councils in Derbyshire and Nottinghamshire has already signalled its intention to become a power 'broker'.

Rodney Brooke, chairman of the Electricity Consumers' Committee for Yorkshire, said deregulation offered authorities a 'real opportunity' to return to their pre-war role as providers of power to households. They would be able to ensure that poorer residents did not fall prey to 'cost reflective pricing'.

This sees the less well-off suffer because they tend to use pre-payment meters which carry a surcharge. They are also denied the financial advantages of paying by direct debit because they do not hold bank accounts.

Mr Brooke said poorer people in Yorkshire paid£35.30 a year more for their electricity than well-off residents.

One of the dangers of deregulation is that the plethora of private sector suppliers predicted to spring up as a result of deregulation will look to 'cherry-pick' richer customers.

This fear, fuelled by the scramble for customers which followed gas deregulation in the south-west, prompted the Derbyshire and Nottinghamshire Local Authority Energy Partnership to set up a project to create a company to engage in the market.

The consortium, led by Derbyshire CC property services manager John Farrell, has already secured provisional approval for a£198,000 Home Energy Conservation Act grant from the Energy Saving Trust.

The plan would see the 'energy services company' broker the best deal for gas and electricity supply. The company would draw up a list of approved suppliers and then form a partnership with a preferred supplier, who would purchase fuel from producers.

The preferred supplier, promoted by the councils using their extensive databases, would pay a commission to the company for each customer signed up. This would be reinvested in energy conservation to help achieve the Home Energy Conservation Act target of a 30% efficiency improvement over the next 15 years.

The supplier would also agree to contract conditions limiting the circumstances in which vulnerable groups of people could be cut off.

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