ELECTRICITY
Best Practice
Following analysis by the Office of Government Commerce (OGC) review team, the national electricity contract has been confirmed as meeting the requirements of the Pan Government Energy Project's best practice criteria.
Contract Award Announcement
Procurement Scotland can announce that a national agreement for the supply of electricity has been awarded to Scottish Power and Scottish and Southern Energy.
The contract will commence on the 1 October 2009 until 30 September 2012 with the option to extend for a further year. The contract is available to nearly all Scottish Public Bodies. Organisations who have signed an Agency Agreement with Procurement Scotland will migrate to the contract throughout this period as their current supply arrangements end. Over 95% of the Scottish Public Sector volume is committed to this national agreement.
Benefits from the contract will include reduced management fees and an innovative contract model which will lead to additional cost saving. Through the implementation of a risk management policy electricity will be purchased prior to the year of consumption which will allow for budget certainty and will manage the risk associated with purchasing in volatile energy markets.
Procurement Scotland have also secured a deal on domestic electricity supply points which results in a 3% reduction on Scottish Power's standard tariff. This reduction will track any future movements in Scottish Power's tariffs.
Scottish Power will supply Half Hourly and Domestic metered sites as well as Un-metered supply points.
SSE will supply the Non Half Hourly metered sites.
The Scottish Power contract will supply the pubic sector with energy from renewable sources in Scotland. In addition, the company will offer a range of energy efficiency initiatives to reduce demand and the option to sell back energy from small scale renewables back onto the grid.
The SSE contract provides access to a range of low carbon and renewable technologies, such as combined heat and power, solar and biomass.
To confirm if your organisation has signed an agency agreement to participate in the national contract please contact the utilities team at:
Email: procurementutilities@scotland.gsi.gov.uk
Read the full news release on the Scottish Governments website.
Agency Agreement
Public bodies wishing to access the national electricity contract must provide a signed Agency Agreement to Procurement Scotland. This document delegates authority to Procurement Scotland to purchase electricity in the wholesale electricity market. As part of the agreement Public Bodies must provide site data information as requested in the data templates. Both of the Agency Agreement and templates are available to be downloaded below.
BACKGROUND TO ELECTRICITY PROCESS
- National Category Forum: The NCF is fully established, including members from across the Scottish Public Sector.
- Completed Category Plan: The Electricity Category Plan is complete and has been endorsed by the NCF.
- Completed Strategic Sourcing Document: The electricity Strategic Sourcing plan is now in published version and has been endorsed by the NCF and by all sectoral Centres of Expertise. The document provides an overview of the Scottish Public sector electricity portfolio and documents the options considered and chosen for the formation of a national electricity contract.
- Collaboration: The utilities team have endeavoured to consult and inform both the customer and the external supply base. Various presentations and workshops have been completed together with individual site visits for one to one communication
- Electricity Workshops: To enable wider consultation a series of workshops were held across Scotland. Starting in Edinburgh, a further three workshops were held in Glasgow, Perth and Inverness. The workshop agenda focussed around the Strategic Sourcing Strategy, Risk Management and the Agency Agreement which is the document public bodies require to sign in order to access the National Electricity Contract. The cross sectoral audience included representation from Finance, Energy Management, Technical and Facilities and Procurement
- Energy Consumption Survey: A detailed Energy Survey carried out in January 2008 which covered all sectors of the Scottish Public Sector gathered information on the number of sites, contractual status and energy management issues that helped form the Category Plan.
- Utilities Site Database: A significant data gathering exercise has been undertaken to collate and analyse a complete register of sites across the Scottish Public Sector this included some of the following information:
- Number Of Sites / Site name / MPAN number / Consumption / Voltage / Billing address / % of Green Energy purchased
- Half Hourly / Non Half Hourly / Domestic / Unmetered
- Electricity ITT: Tender responses were received on the 17 October 2008 whereby the cross-sectoral evaluation team reviewed and scored each response in line with SPD best practice. The contract award is expected to be made in early February 2009.
- Agency Agreement: This document has been finalised by Procurement Scotland following consultation with members of the National Category Forum, Centres of Expertise, Scottish Government Legal Department and various public organisations. The agreement essentially allows Procurement Scotland authorisation to purchase electricity and enter into Supply Arrangements on behalf of the public body.
- Request for Information: An RFI document was issued to energy suppliers and energy consultants in March in order to build a better understanding for the buyers perspective as to how best to take the public sector portfolio to market. Feedback from the suppliers was extremely positive in terms of recognition and being consulted prior to the ITT process and also in the outlook for taking such a large portfolio to market. Procurement Scotland was able to use the feedback from the RFI's in consultation with National Forum members to help formulate the Strategic Sourcing Strategy.
- Risk Management Policy (RMP): Following a mini-tender exercise, energy consultants Utilyx were appointed to establish an RMP which would be used to formulate the rules and guidelines along which the Risk Management Strategy will operate. Procurement Scotland along with the appointed consultants conducted a cross sectoral workshop to help identify the conditions and budget constraints individual organisations are working under to help form the Risk Management Strategy. Procurement Scotland shall facilitate the supply to the client of electricity for the supply period in accordance with this Risk Management Strategy.
- Risk Management Committee (RMC): After extensive cross-sectoral consultation, nominations were invited for membership of a Risk Management Committee. The committee, consisting of a mixture of Finance, Procurement and Technical specialists had its initial preparatory meeting on 20th January 2009 and upon award of the contract it is expected that the committee will meet quarterly to consult and review the policy and procedures for purchase decisions implemented from the Risk Management Policy.
- Office Of Government Commerce Buying Solution (OGCbs):Following a number of suppliers meetings and consultation with various stakeholders across the public sector, Procurement Scotland will utilise OGCbs in facilitating electricity purchases from the wholesale market and in supplying a comprehensive database management system of sites.
NATIONAL CATEGORY FORUM - NCF organisations (as of January 2009)
- APUC
- North Lanarkshire Council
- South Lanarkshire Council
- NHS National Procurement
- Registers Of Scotland
- Scotland Exel
- CGCOPE
- NHS
- Lothian and Borders Police
- Scottish Water
- Edinburgh University
- Registers Of Scotland
- Scottish Enterprise