October 25 2014 Latest news:
Tuesday, September 11, 2012
Thousands of families in Norwich could be set for cheaper electricity by banding together to drive down the price they pay for power.
People in the city are paying an estimated £13m too much for their electricity, according to officers at Norwich City Council.
And they are urging councillors to set up what is known as a ‘collective energy switching’ scheme to push for a fairer deal for families, which they say could save people as much as £200 to £300 a year on fuel bills.
Collective energy switching is when a group of like-minded people band together to negotiate a better deal with power suppliers.
A third party - in this case Norwich City Council - would set up the group with the help of a specialist switching partner to negotiate a better tariff on behalf of the people in the group.
That offer is then presented to the group for householders to decide whether to switch energy provider or not.
Brenda Arthur, leader of Norwich City Council, said: “It’s a wonderful idea and it will make such a difference to the lives of people in the city.
“It’s a win-win for everyone because we know that money which is saved on heating and power will be spent locally, so it will generate an economic boost, as well as helping people.”
A report, which will go before members of the city council’s controlling cabinet tomorrow , says people are often reluctant to switch themselves because of the complexity of the information and the time involved in switching.
In that report, Russell O’Keefe, the city council’s executive head of strategy, people and democracy, said: “Evidence from elsewhere suggests that citizens are often paying £200 to £300 per year more than they need to for energy costs because they are not on the most energy efficient tariff.
“In Norwich, it is estimated that there could be as much as £13m each year being paid to energy companies by citizens that does not need to be due to people being on the wrong energy tariffs.”
The council’s cabinet will be asked tomorrow to agree to set up the scheme and to give officers the go-ahead to find a switching partner.
The switching partner would market the scheme, sign up people who are interested, carry out negotiations with suppliers, while the council would provide overall management and make people aware of the scheme.
Mr O’Keefe said: “The switching partner will receive a switching fee from the successful energy provider for each household who switch energy providers.
“This fee will be made very clear to interested citizens as part of the marketing and communication of the scheme.”
While the amount of that fee would depend on which company the council picks as its switching partner, it is likely to be about £10.
The council would receive a proportion of the switching fee, which would be used to cover the extra costs to the authority of running the scheme.
Mr O’Keefe said: “To fully cover the additional costs incurred by the council for the project we would need to have at least 1,500 households switch energy provider.”
If the cabinet gives the scheme the green light this week, the council aims to award a contract later this month, with the first families asked to decide whether to switch providers in November and December.
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