By Paul Homewood

h/t Joe Public

Back in 2016, Bristol City Council set up Bristol Energy, the first municipal energy company in the South West and one of the first in the country, amidst grand hopes:

Bristol Energy,the first municipal energy company in the South West and one of the first in the country, is officially open for business.The energy supply company was created by Bristol City Council in 2015 to be a force for social good.  It is leading the way as a new model of energy company that contributes to the wellbeing of local communities.

With a fundamental belief in social responsibility, Bristol Energy will reinvest profits back into its founding city, supporting council services to citizens and community projects. The company is looking to support local renewable energy generators and to link with initiatives with a shared ethos across the city and region.

Managing Director, Peter Haigh, said: “This is a new era for the sector, and Bristol Energy is proud to set itself apart from other energy companies as a force for social good. We believe that energy customers, businesses and communities deserve something better, now and into the future – and this means doing things differently. I really believe people will want to get behind us. We have to pay energy bills anyway, so why not pay them to a company that will spend the profits on local services and projects?

“Our growing Bristol Energy team has worked incredibly hard to get us to the point where people can make a no-fuss switch to us through our website. One of our next steps will be to find ways to help the least advantaged energy consumers through our products and services and to build partnerships with local renewable generators. In the longer term, I can’t wait to see the difference our profits will make to local Bristol communities.”

https://news.bristol.gov.uk/news/new-energy-supplier-bristol-energy-is-in-it-for-the-social-good

What could possibly go wrong? Green energy, a social conscience, reinvesting profits back into the community?

Four years later, however, the Council is nursing losses of £40m, and have been forced to sell the customer base on the cheap.

A troubled council-owned energy company revealed a £14.8m loss in its latest annual report.

Bristol Energy, sold off by Bristol City Council last year, made the losses in the year up to March 2020.

The council’s Conservative group leader, Mark Weston, said the figures, which take the overall losses to around £40m, were „truly shocking“.

It was revealed last year that the company’s boss was given a nearly £95,000 payout when he left.

The annual report showed Bristol Energy, which was set up in 2015 before the current Labour administration took over, posted an adjusted operating loss of £8.5m in the year up to 31 March 2020.

Released on 10 January, the report said that figure does not take into account just under £3.3m in „bad debt“ and other costs, such as £219,000 for restructuring.

When these extra costs are included, the official operating loss is £13.26m, and when interest and tax are taken into account, the total loss was £14.8m.

„The directors do not recommend the payment of a dividend,“ the report said, according to the Local Democracy Reporting Service.

Bristol Energy, which was set up to provide ethically-sourced and low-cost energy, sold its domestic and business accounts in the autumn of 2020.

The city council has so far invested £37.5m in the business, which has posted losses above £10m every year since 2018, despite growing its customer base.

‘Millions squandered’

Mr Weston said he suspected the final losses would be „something north of £50m“.

„The squandering of tens of millions of pounds of public funds on this project, long after it should have been terminated, represents an unparalleled example in our city of poor political judgement and financial mismanagement,“ he said.

Bristol City Council has asked its own auditors Grant Thornton to find out the full extent of the cost to council taxpayers of setting up and running the company.

The council has been contacted for comment.

https://www.bbc.co.uk/news/uk-england-bristol-55622656

There is no evidence that Bristol Energy actually sold at less than market rates. (Current prices of the now sold company are over 10% dearer than my deal, which is only three months old).

Meanwhile a similar story has been emerging in Nottingham, where council owned Robin Hood Energy has just gone into administration, leaving Nottingham council taxpayers on the hook for £38m:

The company set up by Nottingham City Council to challenge the ‘big six’ energy firms has been placed into administration.

The Robin Hood Energy (RHE) customer base has been sold to Centrica – owned by British Gas, one of the ‘big six’, and administrators Deloitte is now in charge of the firm.

An outstanding £12.5 million owed for green taxes known as Renewable Obligations Certificates (ROCs), to energy regulator OFGEM, is expected to be spread across the rest of the energy market.

This effectively means all other consumers – from companies with no link to RHE – will foot the bill.

Labour-controlled Nottingham City Council has said it expects its total losses to be £38 million from the company.

It had been suggested that the £12.5 million would be taken by administrators from the amount Nottingham City Council receives from the sale, meaning Nottingham taxpayers would pay the bill.

But the city council says it expects the bill to be ‘mutualised’ from the rest of the energy market.

Speaking on Monday, January 11, during a meeting of the full council, Councillor Sam Webster was asked by Councillor Kevin Clarke, leader of the Clifton Independents, about the £12.5 million payment.

https://www.nottinghampost.com/news/local-news/robin-hood-energy-goes-administration-4880970

As with Bristol Energy, Robin Hood boasted about 100% green electricity and a social conscience. Particularly ironic, given that Nottingham Council have even refused to pay the £12.5m owing for green subsidies, the ROCs which all energy suppliers have to pay.

https://robinhoodenergy.co.uk/business/homepage

We keep being told how cheap renewable energy is. Funny how Bristol and Nottingham City Councils lost a fortune trying to flog it!

via NOT A LOT OF PEOPLE KNOW THAT

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January 14, 2021 at 06:30AM