Electricity Payments

As noted above, the Unitary Charge excludes payment in respect of electricity.  The payment of electricity is covered by the Electricity Cost Adjustment (ECA), and is calculated in order to ensure that the Authority is subject to price risk and the Service Provider is subject to consumption risk. If actual electricity consumption is less than forecast then the first 5% of savings are retained by the Service Provider. Savings above 5% are shared equally between the Service Provider and the Authority.

The Payment Mechanism also includes provision to ensure that if the Service Provider does not carry out the CIP as forecast the Authority is not subject to any additional electricity payment as a result.

For the purposes of the bid to ensure consistency in evaluation, bidders are asked to assume a unit cost for electricity of [x] pence/KwH indexed on the 1 April each year at [2.5%] per annum.

The Authority reserves the right to procure electricity itself or require the Service Provider to do so during the contract term. The key determining factor will be which party can procure at the lowest price. As part of the ISDS submissions the Authority will seek confirmation of the prices that the bidders can procure at initially upon service commencement to inform this decision.

It should be noted that Authorities are often able to procure on more favourable terms than bidders due to their bulk purchasing power often due to membership of regional purchasing consortia.

The Payment Mechanism is deigned to ensure the correct payment is made under either scenario.  If the Authority decides that the Service Provider should enter into the electricity contract it should consider if the current electricity supply contract can be terminated or novated to the Service Provider.]

The electricity price will be subject to market testing every [2] years in accordance with Schedule 9 of the Model Contract. However, the Authority can at any time elect to carry out the market test of energy or to enter into a contract for energy itself.

The Authority may request from time to time a change to the current lighting regime. This will require the Service Provider to calculate an Alternative Forecast Consumption for each Electricity Tariff Band.

The drafting provided regarding the Alternative Forecast Consumption assumes Parties agree to calculate a forecast impact of change to the current lighting regime prior to implementation of the change.

Until the use of remote monitoring technologies has been agreed as an acceptable method for calculating electricity charges the method of measurement will need to be agreed between Parties prior to entering into the Contract.

In the event that the change in lighting regime results in a breach of terms of the current electricity contract the Parties will consider the extent of additional costs and may agree to carry out an Electricity Market Test.