With a disturbingly convincing impression of Ricky Gervais, the otherwise calm and controlled Bursar sitting opposite me blurted out “they’re having a laugh, they are having a laugh”. Rarely do you witness a rock-solid Ricky Gervais impression, but this lady clearly has a hidden talent. Yet the cause of this theatrical outburst was not really very funny at all; it was the explanation given to her by the Energy Procurement Consortium her school is contracted to for several years to come. Completely unintelligible, jargon laden and unconvincing.
She summarised it thus;
“Apparently, I am handing control of my second largest budget item to an unregulated energy broker who tells me I can have no choice of my virtually unregulated suppliers, I cannot change my contract dates, they are not able to tell me in advance what I will pay, or when the costs will change and by how much because I am on a so-called Pass-through contract where the suppliers can charge me whatever comes there way, and joy of joy I am locked into a seemingly never-ending rolling contract which I cannot interpret or escape. And to make life interesting the bills will be deconstructed to show 20 different items! The broker then sends me a plethora of indecipherable graphs to demonstrate how very successful their energy contracts have been compared to the “Wholesale Market”, whatever that may be…. they’re having a laugh”. Sadly, this bright, challenging and clearly talented Bursar is right…
So why are so many independent schools locked into Consortia?
Put bluntly the framework is as transparent as a foggy day in Winter; Members simply will never know how much the broker earns (do you know it is common practice for brokers to add a fee to standing charges because clients rarely notice these?), how decisions are made about choice of supplier, who makes the decision to buy energy at any given time, and what incentives are hidden in the relationship between broker and supplier.
Worse still, Flexible framework buying relies upon the competence of buyers to pick the right time to buy in a highly volatile market. With so much at stake, this really is quite a gamble. The graphs show the high degree of daily and monthly fluctuation in wholesale energy prices, with considerable volatility within just a few days. If the broker makes a poor decision, the consequences are irreversible for Members.
So, what is the alternative? Simple really, in fact disarmingly simple. Call Powerful Allies and under our Open Competition Charter we warrant that
Comparisons will be comprehensive, simply prepared and transparent in calculation.