Presentation Transcript

1. Energy Brokering Laurence Arbuckle Senior Manager March 12 2013
2. Contents Background, Partners & Objectives Oil Brokering Other Initiatives Bryson Energy Buyers’ Club Findings, Savings & Challenges Going forward
3. Background Commenced in October 2012 The Project addresses all 3 causes of fuel poverty Cost of fuel - through brokering Level of Income - through benefit maximization and budgeting Energy Efficiency – through advice in the home and referral to Bryson Energy Advice Freephone
4. Partners Bryson Energy, Consumer Council for NI, Fold Housing Association, NEA, Derry City Council, Irish League of Credit Unions, Ulster Federation of Credit Unions, Derry Credit Union, NIHE (advisory) Oil Federation suppliers who have signed the Consumer Council Customer Charter
5. Objectives To negotiate a reduction for all orders of heating oil To negotiate smaller deliveries (500L) to tenants in fixed areas at no financial penalty To reduce the need to budget by purchasing oil expensively in plastic containers To encourage householders to utilise Credit Union accounts to save for oil/utility bills. To encourage Credit Unions in the North-West to use their combined strength to get reduced prices for all their members
6. What is Energy Brokering ? Energy brokering – bulk purchase of energy – gas, electricity, oil Examples in USA, Europe, England Recent studies by University of Ulster have shown potential savings of 20-22% by bulk buying
7. Why Oil ? Unregulated - no transparency on pricing 68% households in NI (Rural – 89%) Bryson’s cost benefit analysis says – successful implementation of oil brokering – could have a major impact on fuel poverty Budgeting – a need to develop more flexible payment methods that address its high price and fluctuations
8. Oil Price trends in NI 2009- 2013 Note: 900 litres of oil was £494 at the end of June 2012 rising to £577 yesterday - £83 in eight months. The Sutherland Tables estimate that the cost of heating an average 3 bedroom house is approx £1,600 per annum – approx 3 fills of oil.
9. Derry this week….. 200 litres of heating oil in Derry costs 72p per litre compared to 64p i.e. 8p cheaper when you buy 900 litres in bulk £72 extra to buy 900 litres in smaller lots or approx £216 per year for a fuel poor family just to budget Householders are also being charged up to £12 extra for using their credit card. Plastic containers – even more expensive and dangerous means of budgeting – but supplier has no delivery costs.
10. Various initiatives…..
11. Belfast City Council – Be Warm scheme Oil stamp scheme – January 2009 Aids householders to budget for heating oil Approx 30 suppliers No reductions negotiated Council plays an information + admin role only Householder deals with supplier directly Other similar schemes across NI
12. Credit Union initiatives Credit Unions offering loans based on savings – Easy Share – useful for budgeting for fuel Newry Credit Union – Oil Loan Derry Credit Union – Pledged Loan under Secured Shares (PLuSS) Interest 0.6% per month on reducing balance Borrow £500 for £9.60 interest over 6 months or £4.92 for 3 months Standard loan of £500 over 6 months = £18 Cheques to suppliers - agreed
13. Community Group negotiate best deal for customers 80 members in village – 12 suppliers – monthly call Use Paypoint card to save Multiple deliveries at one time reduce costs for suppliers – so they can be more competitive Benefits for customer Saving 4p – 5p per litre Smaller loads available – allows better budgeting at no financial penalty – no less than £60 or 100 litres
14. Glenravel Oil Club 81 members to date - 69 of those members have placed orders. First 50 members to join received a free energy monitor, next 50 received £20 worth of oil stamps. 33,000 litres orders to date. The minimum order is 200L. The Oil Club only deals with local oil suppliers in the area who accept oil stamps. Savings - an average of 4ppl over the 3 months
15. Bryson Energy Project Press Release on project in Sept 2012 Oil federation suppliers invited to take part – those who signed the Consumer Council Customer Charter Leaflet selected areas – residents enrol for project Bryson collected contact details (preferably text), fuel usage, typical size of oil order, normal method of payment and (whether or not they were Credit Union members)
16. Providing information… Provide suppliers with further information on project Agree processes and our target areas Agree minimum load that can be supplied Agree price time limit with suppliers Outline in writing to residents the roles and responsibilities of Bryson Energy, Fold Housing Association, the oil suppliers and their own responsibilities as residents and purchasers.
17. Launch - October 2012 Project commencement date – Monday October 1st 2012 Bryson notified of oil needs per Fold Bryson request prices for bulk load from local suppliers Suppliers supply best price for month by given date and valid period of offer Preferred supplier selected for that period Tenants notified immediately of supplier and confirmed price per litre by preferred method – text, email or HA directly – and the time limit
18. Weekly Process Chart for Oil Buyers Club
19. Additional benefits Free and independent energy advice and information 0800 14 22 865 Referral to any relevant energy efficiency grants / incentives e.g. homeowners Discussion on cheapest electricity tariff Benefits assessments to maximise incomes.
20. Issues Trading Standards Service – minimum legal load = 500 litres Price based on bulk order – cancellations can affect VAT for domestic customers – 5% < 2,300 litres Local jobs - Oil Federation members and customer charter - small local suppliers may not be signed up Contract between resident and oil supplier Need for quality assurance
21. Extra Charges
22. Findings Big interest raised across NI in oil schemes – interest by media, Councils, fuel poverty/community groups Possible to broker savings Same price per litre for 500L as 900L – achievable Identified real need for cheap budgeting methods for fuel poor as brokered price is not enough on its own Credit Union initiatives need broadened and developed
23. Savings Savings of between 2.2p – 7p per litre against our Consumer Council benchmark 3p per litre less than the preferred supplier’s own advertised local price. Average savings of £11 - £35 on 500 litre orders. Plastic container price can be 10ppl+ in excess of bulk price Buying in bulk at standard price can save £270 per year for the average family using up to 3,000 litres of oil With brokering, savings increase by up to another £100 over the year.
24. Challenges Trading Standards 500L rule hampered uptake Some large oil suppliers refused to co-operate Fuel poor householders unable to buy 500 litres @£300 Fuel poor are paying dearly for the privilege of budgeting for oil – credit card fees, loyalty schemes, Paypoint, oil drums, etc.
25. Objectives going forward… To develop an integrated system to support people in not only getting a fair price for fuel but also in getting a fair price in budgeting for their fuel. To persuade the Credit Union movement to promote low cost loan options specifically for the payment of fuel bills.
26. Thank you