Issue details

In 2009 national government agreed to the procurement of electricity and gas via flexible purchasing in accordance with the recommendation of the Pan-Government Energy Project and recommended all public sector organisations adopt aggregated, flexible and risk managed energy procurement through a recognised Central Purchasing Body, such as YPO. Lancaster City Council is an associate member of YPO.

Flexible purchasing means buying the annual requirement for gas in regular amounts in advance. This enables purchases to be timed to avoid unusual market price spikes and also spreads the risk of price fluctuations. It does not guarantee that all energy is purchased at the lowest possible price available during a particular period but experience during the current contracts has shown that overall this approach has resulted in procurement at below average prices.

The Council’s current contract with British Gas is due to expire on 31 March 2017. Due to the requirement under flexible purchasing for the contractor to buy gas in advance, it is necessary to put in place a new contract well before the end of the current contract to allow sufficient time for the benefits of flexible purchasing to be realised. Consequently YPO has undertaken an OJEU compliant procurement process to identify a supplier for the next contract period.