Hertfordshire County Council to spend more than £80m on gas and electricity in coming four years
By Deborah Price - Local Democracy Reporter
18th Jul 2024 | Local News
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Profits made from the supply of gas and electricity to Hertfordshire County Council buildings will be ploughed back into council services - in Kent.
Over the next four year period (from April 2025 to March 2029) officials at Hertfordshire County Council expect to spend more than £80 million on gas and electricity.
And at the latest meeting of the council's cabinet, councillors agreed to continue purchasing that energy through the LASER Energy Framework Agreement.
The company already provides energy for more than 200 authorities, including Hertfordshire.
And over the "last contract year" buying from the company is reported to have saved the county council £7m, compared to purchasing at average market rates.
LASER is a company that is wholly owned by Kent County Council, with any profits generated by the company used as additional income to support council services in Kent.
And after the meeting a spokesperson for Hertfordshire County Council confirmed the benefits to Hertfordshire and to Kent.
He said that by working with LASER the council reduced its exposure to price volatility, secured best value contracts and limited financial risks, as well as delivering savings for taxpayers.
And he acknowledged that any profit made by LASER would be used to benefit public services in Kent.
At the meeting of the cabinet, councillors heard that in providing energy for more than 200 authorities, LASER spent in excess of £1.5 billion on energy.
And it was reported that with its buying power and expertise, the company had constantly beaten average energy market prices over the current contract.
Executive member for resources and performance Cllr Bob Deering said the proposal was "thought through" and "prudent".
But as well as highlighting the £7m saved, compared to average market levels, he also pointed to the council's "significant" reduction in the amount of energy consumed.
Data presented to councillors showed hat between 2020/21 and 2023/24 the cost of gas and electricity had increased, from £11.58m to £28.2m.
But over the same time the kWh used had decreased, from just over 158m to 126.6m.
". . . although in broad terms energy costs are going up, we have achieved a significant reduction actually in our usage of energy, which clearly is extremely important," said Cllr Deering.
"And you will see that we are hoping that for the 24/25 year our energy costs might come down by about £5m.
"A lot of expertise goes into this. A lot of thought goes into this. And we are again – it is absolutely fair to say – making very prudent decisions that will benefit the operation of this council and therefore all our residents."
Meanwhile leader of the council Cllr Richard Roberts also highlighted the amount of energy that had been provided to the county council from renewable sources.
He said that in the past year only one per cent of energy had come from coal, "a significant amount" from solar and wind making up the difference.
Councillors heard that officers had looked at other options for this four year contract period, starting in April 2025.
Those included buying short-term fixed price contracts or procuring energy by direct tender.
But, it was reported that LASER had been selected as the best option for the county council.
And among reasons given for LASER's selection was their capacity, capability and experience to deliver, the protection against supplier failure and the ability to buy green energy backed by Renewable Energy Guarantees of Origin (REGO).
Commenting on the decision after the meeting, a spokesperson for Hertfordshire County Council said: "By pooling our energy requirements and spending power with other local authorities we have been able to secure excellent deals for the gas and electricity supplied to council buildings.
"By working with LASER, a company owned by Kent County Council we will reduce our exposure to price volatility within the energy market but also deliver savings for taxpayers.
"Whilst securing the best deal for our energy contracts is a priority, the council has also undertaken works to reduce our energy consumption and we are pleased that these actions have seen demand at our sites drop by over 30 million kilowatts per hour."
Meanwhile a spokesperson for Kent County Council confirmed that any profit made by LASER – which is part of Global Commercial Services Group Ltd – goes into profits that are returned to Kent County Council.
Global Commercial Services Group was first established 90 years ago – and now operates in categories that include recruitment, education supplies, energy and carbon services, IT services legal services and HR.
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