Content

Purpose of
the report:
The purpose of the report is to
seek approval to enter into Supply
Contracts with the suppliers appointed under the Crown Commercial
Service Framework Agreement for Supply of Energy 2 (RM6251) for the
supply of electricity and associated services (Lot 1) and the
supply of natural gas and associated services (Lot 2) with effect
from 1 April 2024.
 
Reasons for
the Recommendations:
The recommendation in the
report were presented as Oldham Council currently procures its
energy through Crown Commercial Service (“CCS”)
framework arrangements.
 
The CCS Framework for the
Supply of Energy and Ancillary Services (RM6011) commenced on 14
August 2019 and expired on 1 October 2023. Electricity and
ancillary services were supplied by EDF Energy Customers Limited
under Lot 1 and natural gas and
ancillary services were supplied by TotalEnergies Gas & Power Limited under Lot 3.
The Council was a party to a Supply Contract with each of the
suppliers. Electricity and Gas were supplied to the Council under
the RM6011 framework arrangements until 31 March 2024.
 
The CCS Framework Agreement for
Supply of Energy 2 (RM6251) commenced on 21 February 2023 and will
expire on 20 February 2027. There are two lots under the RM6251
Framework Agreement; Lot 1 - Supply of Energy - Electricity and
Additional Services and Lot 2 - Supply of Energy – Natural
Gas and Additional Services. The sole supplier under Lot 1 is EDF
Energy Customers Limited (“EDF”) and the sole supplier
under Lot 2 is TotalEnergies Gas &
Power Limited (TotalEnergies”).
 
The Council should have
entered into a Supply Contract with each
of the appointed suppliers under the replacement RM6251 Framework
Agreement prior to 1 April 2024, but the transition from RM6011 to
RM6251 did not run as planned.
 
Therefore, retrospective
approval is needed to enter into a
replacement Supply Contract with each of the appointed suppliers
for a term commencing on 1 April 2024. The template Supply
Agreement shared by EDF states that the term runs from the Earliest
Supply Start Date, which will be 1 April 2024 for the Council until
the expiry or earlier termination of the final associated delivery
period.
 
The Council generally opts for
Locked 6 (L6), which offers a 12-month fixed price. The trading
begins 6 months (1 October to the 31 March) annually. The delivery
period starts on the 1April for 12 months. The Council is automatically
entered into the subsequent 12-month contract period without
needing to provide confirmation. However, if the Council wishes to
opt out of the next 12-month period, it must notify CCS accordingly
prior to the 15th September deadline
before delivery period.
 
 
Options/Alternatives:
The
options that Cabinet considered in relation to the submitted report
were:
Cabinet Members
were advised that there was not currently a viable alternative
option for the 2024/25 financial year, particularly because the
Council confirmed its requirements to CCS for the provision of
electricity and natural gas over the 1 April 2024 – 31 March
2025 delivery period back in September 2023. However, other options
can be considered for the future. It is anticipated that preparing
to change the contractual arrangements for the provision of
electricity and gas would need a minimum of eighteen months to two
years preparation. This would ensure the procurement process is not
rushed and that the transition to alternative suppliers (if
required) is managed to minimise the impact of the transition on
officers and other suppliers, to avoid transfer objections and out
of contract periods, and to incorporate bridging contract
periods.
 
Decisions:
That the Cabinet:

1.   
Authorises a Supply Contract for electricity and ancillary services
to be finalised and entered into between
the Council and EDF Energy Customers Limited under Lot 1 of the CCS
Framework Agreement for Energy Suppliers 2 and for a Supply
Contract for natural gas and ancillary services to be entered into
between the Council and TotalEnergies
Gas & Power Limited under Lot 2 of the CCS Framework Agreement
for Energy Suppliers 2, each for a 4-year term from 1 April
2024

Delegates authority
to the Director of Economy, the Head of Procurement and Legal
Services to formalise the contractual arrangements in relation to
the required Supply Contracts.
Delegates authority
to the Borough Solicitor, or his nominated representative, to carry
out all necessary associated formalities.