Sustainable
Development Decision Report
Amendment to Item 19
In respect of
Item 19 of the Decision Report of Sustainable Development Committee of 23
September 2015, I would propose the following amendment: –
That the
following wording be included in recommendation 19 (1) “ on the basis
that the Business Plan for Hebrides Energy be amended so that
responsibility for base and tariff setting would transfer from the
Licenced Supplier to Hebrides Energy.”
Councillor Alasdair Macleod
(Chair of Sustainable Development): This question has already been debated at committee,
several reports have been produced and it was brought up at the Energy MOWG
recently and I am surprised that the question is being asked again anyway,
that's the essence of democracy and I respect what Mr Murray is getting at.
One
of the main objectives of the ESCo is to source locally generated renewable
energy and to retail it to the local market at the most discounted rate
possible. That point will be determined by the establishment of large-scale
community-owned generation without direct access to generation through the
wholesale purchase of electricity, the ESCo will not be able to set its own
tariff independently. When direct access to generation is achieved the tariff
structure will be set by the directors of the ESCo.As it would appear at the
earliest point as to which this could happen is 2020/2021.
The Comhairle has
been looking at methodologies which allow the ESCo to become operational and
make initial phased entry into the market. The comhairle's agreed that in the
period now until 2020/2021 that the most appropriate method for entry to the
market. Is partnership with an established licensed electricity supplier.
Following
an open procurement exercise, a suitable electricity supply partner has been
identified and it is envisaged one of the tariffs offered by that company will
be made available to island households and businesses branded as 'Hebrides
Energy' and offered to the Outer Hebrides ESCo junior partner of the licensed
electricity supplier. It is anticipate that the new tariff will represent a
modest saving to island consumers who switch.
The directors of the ESCo,
including the Comhairle's director, will be free to decide whether or not to
accept that tariff for the Outer Hebrides.
Councillor Gordon Murray thanks chair and thanks to the chair for accepting the amendment. Can I direct members to the actual paper 7.3 on item 19 on sustainable development where it is very clearly stated in the the table that under the line responsibilities of Hebrides Energy and licensed supplier the base tariff setting is under the licensed suppliers responsibility.
Councillor Gordon Murray thanks chair and thanks to the chair for accepting the amendment. Can I direct members to the actual paper 7.3 on item 19 on sustainable development where it is very clearly stated in the the table that under the line responsibilities of Hebrides Energy and licensed supplier the base tariff setting is under the licensed suppliers responsibility.
So the main aim of the ESCo is addressing
the scandalous fuel poverty issues of our islands that we all know about. One
of the main reasons behind fuel poverty is the high energy or fuel costs. These
have been out with our control but I believe now we have an opportunity to
change that.the high energy costs have resulted in record levels of crisis
grants, which was reported, 200 families at the end of 2014 claiming crisis
grants and we all know what different strands of poverty does to youth
attainment in schools.
With rising utility bills, surcharges we are in a
precarious position. However, with the opportunity to decide or control the
price of electricity for our community we can change that. We can set a price
based on our circumstances putting the community first rather than profit and
shareholders of a private company.
There's a debate ongoing regarding nationalizing
energy companies and here we have a chance to localize our electricity price to
protec families from rising electricity prices. Our average incomes are lower
her than other parts of the country and this is another opportunity to possibly
increase disposable income for each family through these savings. Quoted on the
report is savings of £130 a year which I imagine is factoring in the private
partner's take - is that really going to address fuel poverty - savings of £130
a year, that's £2 a month (corrected at the time to £2 a week).Would anybody go
through the rigmarole of changing electricity supplier for a saving of £2 a
month (error £2 a week).?Surely with the price of electricity under public
control we can achieve greater savings.
Nottinghamshire council is doing the
same thing and giving greater savings to their local people.
Also if the
savings that are reported at £130 a year - would the lack of take up mean
a waste of our own resources in setting this up - officers' time on the
whole project.
I really believe this is an excellent opportunity for his
council to take the price of electricity back into public control for the
benefit of families right across the Western Isles - I move the amendment.
Councillor Donald Crichton (Vice chair of sustainable development) I have nothing much to add to what the chairman has already said. I think it's very clear that directors will, it will be within their gift to set a tariff and that has already been agreed so Ido t really see the necessity of the amendment been put forward - I second the motion
Councillor Rae Mackenzie : thank you chairman. Well I think, you know, we all, I think in this chamber, have likely put fuel poverty at the top of the list of priorities and I think we all want to, the islands want to reduce this, not just people in here.
Councillor Donald Crichton (Vice chair of sustainable development) I have nothing much to add to what the chairman has already said. I think it's very clear that directors will, it will be within their gift to set a tariff and that has already been agreed so Ido t really see the necessity of the amendment been put forward - I second the motion
Councillor Rae Mackenzie : thank you chairman. Well I think, you know, we all, I think in this chamber, have likely put fuel poverty at the top of the list of priorities and I think we all want to, the islands want to reduce this, not just people in here.
And I don't think
there's much division here on this particular point. There's a long list in
this report of what should be the responsibility of Hebrides Energy and what
should be the responsibility of the licensed supplier.
At the very top of the
licensed supplier is the base tariff setting. Now, I think this is the most
basic part of it and we don't have to accept what the company decides but the
point is they'd have control over it at the end of the day although I
appreciate what mr Macleod has said about the tariff being set by the directors
- our director might be overruled on this point and I think at the end of the
day, it's important that we do have the final say as to what the base tariff is
set in obviously we are going to take the advice of the energy company that's
going to be involved in this and I don't know who it is, we keep referring to a
chosen supplier, but the point is we should have the final say and I feel
strongly about it, thank you.
Councillor Angus Campbell, leader of council administration: thanks, I think in terms of the aims on fuel poverty and reducing the thing we are all at one but I do think there is a fundamental misunderstanding of the process we are in to get there for our electricity company. What we are having to do at the moment because we have no bulk of electricity ourselves being produced in these islands is buy of a partner organization and that will become apparent when the tendering process we are in which will identify the one that gives us the best deal becomes known.
Councillor Angus Campbell, leader of council administration: thanks, I think in terms of the aims on fuel poverty and reducing the thing we are all at one but I do think there is a fundamental misunderstanding of the process we are in to get there for our electricity company. What we are having to do at the moment because we have no bulk of electricity ourselves being produced in these islands is buy of a partner organization and that will become apparent when the tendering process we are in which will identify the one that gives us the best deal becomes known.
We cannot tell them what they will sell our electricity at to us so it's
up for the directors to take that into consideration to maximize the best price
going to the consumer but it would not be competent for a director of a company
to trade at a loss so we are going to be tied at what we are buying the
electricity at but the ability to set the tariff is thee with the directors but
we certainly cannot , the long term aim is a separate thing altogether.
When we
have a mass of production in the western isles gives us a direct buy in for
electricity then we are much more able to set a price that is not related to
the company we are relying on sells to us - no, it is not a perfect answer but
it is a step process towards getting to the place where the interconnector's in
place and we are able to have lots of energy here and we are able to buy it and
pass on that savings. So I do have a lot of sympathy with what Mr Murray is
saying but the process we are in , I think as the report shows, does not allows
us to that unless we put huge amounts of subsidy into the system to put it
below that price.
I don't know where that funding would come from . I, too,
have been in touch with Nottingham Council so they have the advantage of having
a large amount of customers signed up which gives them a strong position in the
market and they are also in a position where they are able to draw on some
their own Electricity production. So I do think , I happen to agree with the chair
that it is unnecessary but I totally share the aims of what we are trying to do
and I think we all do in this room thank you.
Councillor Angus Mccormack (chair of audit and scrutiny and poverty action group) : thank you very much convenor. I too share Councillor Murray's aspiration in terms of poverty and fuel poverty , I would certainly like something to happen about that very quickly indeed - this is not the way to do it. And unfortunately, when you are in the situation we are currently in whereby from a private provider, we cannot determine what a private provider's price is going to be. And as the leader has alluded to we are not in a position he in the islands with a small consumer base , I mean prices, for example, or in London , where you can bring in a huge consumer base managed to drive prices down in order to get the customer base, we don't have that customer base here so it's extremely difficult to see how a private provider would find it easy to make huge reductions in the cost coming to us.
Councillor Angus Mccormack (chair of audit and scrutiny and poverty action group) : thank you very much convenor. I too share Councillor Murray's aspiration in terms of poverty and fuel poverty , I would certainly like something to happen about that very quickly indeed - this is not the way to do it. And unfortunately, when you are in the situation we are currently in whereby from a private provider, we cannot determine what a private provider's price is going to be. And as the leader has alluded to we are not in a position he in the islands with a small consumer base , I mean prices, for example, or in London , where you can bring in a huge consumer base managed to drive prices down in order to get the customer base, we don't have that customer base here so it's extremely difficult to see how a private provider would find it easy to make huge reductions in the cost coming to us.
I am pleased that we have found
somebody who is prepared to offer us a deal at some point and that is really
good news and that will help and the other thing you have to bear in mind is
that this will not kick into place until 2020 - fuel poverty has much more
pressing issues than that , my own view is that the best way to tackle that is
to pursue SSE in terms of their removal of the 2p surcharge that is imposed
upon the Highlands and Islands - were we to succeed with that and I don't
see any reason why we should not - Ofgem, I know will not make any objections,
if SSE reduce their price and I'm quite confident that the Scottish Government
would support an initiative in this area - my idea would be that we would try
and get them together, as I have said earlier in this series of meetings, try
and get these individuals round the table and press the case and I know that
our officers will endeavour to do that and I think that is the best way forward
- were that to succeed for example , it could mean for somebody with total
heating and total control as much as a £400 per year saving, that would really
make inroads into our fuel poverty and I think that is the way that we have to
go, unfortunately even if we were to adopt Mr Murray's proposal , it's not
going to do anything at all for fuel poverty until 2020 at the latest so it
really , it would be an academic exercise at this point but in actual fact it
isn't a practical thing to do. I understand his aspirations,
I share his
aspirations but his way is not the way forward.
Councillor Gordon Murray: just to sum up, I mean , trying to address this huge anomaly of having the biggest or greatest renewable energy potential but then having the worst fuel poverty rates so having control of the price of electricity would address this and it's down to the political will of this council whether they want to take responsibility or pass it on to a private company, thanks.
Convenor: what you've said is not quite right and I'll ask the leader to come in - he spoke about it in the debate and Mr Macleod would look at that in his summing up until we reach this stage as mr Campbell said, until that power is being created, we have no option but to be in partnership just as SSE determines what we pay, we have no choice in the matter but perhaps Mr Macleod will speak to that in coming to a conclusion, and if not, I'll ask mr Campbell who raised that item to come in, so mr Macleod.....
Councillor Alasdair Macleod: thank you convenor, as I was told that at one time that you spoke on my behalf, I wouldn't like that to happen again - I don't think Mr Murray and I are on opposites here , everybody in the chamber is united, we have huge fuel poverty issue and it's all credit to the fuel poverty group they've made big strides to address that.
The long and the short of it is , there is no simple answer and I
think it's not fair to try and sell to the general community that at the flick
of a switch you can have cheap electricity , it just can't happen. And the
reports that our team have produced and I respect actually what the officers
have written, they have researched many many months and sow times officers are
right and councillors are wrong , it does happen occasionally , so with all due
respect, I think we should read the reports, see how far we have come, we've
come along way in a short time but not far enough and I agree with councillor
Murray , it would be wonderful if we could provide cheap electricity to the
impoverished people of the western isles - it cannot be done that easily and I
think the route we are following , the correct route and also can I say that
ESCo as a company , there's no democratic deficit in ESCo, everything it does
will be reported to the council , for your scrutiny and that's they way it
should be , so I don't think we are at opposite sides Gordon , I think we are
in this together, and the more u tied we are , I think the better chance we
have of reducing the fuel poverty issues we have on the western isles
Councillor Angus Campbell I was merely going to make a point of order , that we don't put out inaccurate statement in this debate - we do not have the ability to take control over electricity price for customers in the western isles and I wish we had . It's important that we don't think that this is the choice that is in from of us
Councillor Angus Campbell I was merely going to make a point of order , that we don't put out inaccurate statement in this debate - we do not have the ability to take control over electricity price for customers in the western isles and I wish we had . It's important that we don't think that this is the choice that is in from of us
