How can we reduce energy costs?
The theme for our November BiteSize event is reducing the cost of energy and we will have three speakers who will approach this in three different ways from energy usage reductions via audits through to generating your own energy and selling any surplus to the National Grid. In addition to this event we are also looking to form an energy club to harness the combined purchasing power (pun intended!) of Dorset’s halls. This comes as a result of our July BiteSize when we discussed group purchasing and benchmarking.
What is an Energy Club?
Quite simply, the energy club members use their combined spend on energy to negotiate better rates with suppliers. However who does the negotiation on behalf of the club? Obviously the members themselves do not have the systems and awareness of the market necessary to do this successfully. Enter the energy brokers, LSI, who are the specialists in this and with whom we have had preliminary discussions about creating a group scheme.
What are the benefits of an Energy Club?
We have already outlined the primary benefits, lower rates through combining purchasing power and lower rates by employing specialists in the market, but there are other benefits too.
LSI tell me that from their experience in dealing with village halls many are paying higher rates than necessary because:
- They have not understood and responded to suppliers renewal offers and have therefore been rolled over on to expensive rates
- As a result of changes in officers halls often have no idea what their contractual situation is and pay bills as they arrive with absolutely no due diligence being carried out
- The charging mechanisms of suppliers can be extremely complex and difficult for lay people to understand
- Some halls are paying VAT at the wrong rate
- Many halls are paying on estimated bills instead of actual readings and so are paying too much ‘up front’ (LSI can use a smart metering system to overcome this)
- The whole process of changing energy supplier can be a real pain and one you would rightly want to put off regardless of the prize! Would you want to do this every year?
How does an Energy Club work?
LSI are offering a ’free bet’! You send them your latest energy bill and they will analyse it and tell what they can offer instead. Whether you decide to accept the offer is then totally up to you. Sending in your bill does not place you under any obligation to use their service. There is no direct fee to pay for the service as the energy suppliers pay the brokers commission on new clients introduced and on renewal.
Each hall joins on an individual agreement initially which expires on a fixed date for the scheme. Each year the brokers then use the combined spend of the members to go to the market to seek a new deal for the coming year. The members of the scheme have to do nothing!
One other point, a part of the commission paid to the broker is passed on to us at DCA. This will help us fund the Village Halls Advisers post in an ever increasingly difficult financial environment.
What next?
At the moment we are testing the water to see if there is enough support to float the scheme. If a dozen or so are interested we will go ahead and set it up and hopefully we will be able to persuade other halls to join the pilot group later on. We would like users to share information on how much money being members of the club has saved them via the benchmarking system we are currently adding to the Dorset Halls website. If you share information on your savings then other halls will see the benefit and so join the club increasing the purchasing power and so gaining further cost reductions for everyone. This really does seem to be a case of everyone winning (except the power suppliers!).
If you are potentially interested in joining an energy club please email me at Peter.Orchard@dorsetcommunityaction.org.uk