Energy procurement: minimum standard questions
Information and action to take at the end of a contract.
This section should be read with the energy guidance.
This section relates to information and action at the end of a contract. You can use this information to ensure you have the necessary and timely information to make decisions and take the correct actions.
Your current supplier should confirm:
- the contract expiry date – ideally, this should be stated on each bill or invoice
- your notice period – potentially 2 apply, either from the energy provider (typically no longer than 90 days[footnote 1]) or from the third party intermediary (TPI), which is set by TPI
- that they will send a reminder that your contract is due to expire, including:
- prior to a new energy supply transferring to another supplier, the existing supplier should provide details of any debts owed at least one month prior to the new supplier that may block transferring supply
- where and when the termination notice should be sent (typically a maximum of 90 days in advance and it should be to an email address)
- a 12-month (including half hourly data, if applicable) usage summary to aid energy management initiatives and obtaining renewal quotes
- that they will send confirmation that the termination notice has been received and accepted – this confirmation is needed from both the TPI and energy provider
- if the contract is automatically renewed following expiry of the contract end date (sometimes referred to as auto-renewal, roll over, or evergreen contract) – if they confirm that the contract is automatically renewed, they should confirm that they will send a notice[footnote 2] that your contract is due to renew to allow you to review or source a replacement contract
- if the contract falls into deemed rates, the supplier will regularly contact the school to inform them that the contract has expired, and that action is needed
- that no notice period or financial penalty will be applied for moving out of deemed rates to a contract rate, with any provider
You should:
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Read DfE’s energy guidance.
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Plan time to determine which options best suit your needs.
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Consider asking your existing supplier for a renewal quote.
Remember:
- do not let your contract expire without a replacement
- all procurement must be compliant with the procurement regulations
- get help buying for schools is available to help
This section is about obtaining quotes for energy supply. It covers information that you need and information that the supplier should provide.
You should:
- start early and in advance of any end of contract and termination dates for your existing contract – it can take 2 months to switch, the industry standard is 6 weeks provided the supply account has no outstanding debt. Some contracts are only available 6 to 12 months in advance
- seek internal confirmation of
- how far in advance you want to review your energy contracts
- how long you want to buy your energy for (contract length)
- whether your organisation wants a fixed or variable energy cost contract
- ask suitable public sector procurement compliant suppliers to quote
- request written quotations from your selected suppliers – if using a broker who offers multiple quotes already you should still ask for quotes from at least one other supplier as opposed to the broker
- do not accept verbal quotations or offers
- request the quotation to indicate all included and excluded charge elements such as unit rates, taxes, levies and all non commodity charges
Your quoting suppliers
Your quoting suppliers should:
- ask you to sign a letter of authority (LOA) appointing them as your agent to act for you in a legal capacity – at the quotation stage, this should be only to obtain quotes and should be valid for 12 months from the date of signature
- may ask you for additional information such as MPRN (gas) or S or MPAN (electricity) numbers which are available on your bill or from your provider
- may ask you to provide demand and meter operator information – if it is not on your bill, the current supplier should be able to provide this information
- provide a written quote detailing:
- the energy cost (if fixed rate) applicable standing charges
- full disclosure of all fees, rebates, and supplier paid commission that the agent will receive as their remuneration
- the cost of any other services and fees such as standing charges
- any additional services that are offered and the cost for providing them
- confirm that they will provide the termination information detailed in the ‘end of current contract’ section
- be aware of a ‘take or pay’ type contract whereby the end user commits to a minimum amount of energy regardless of actual usage, unless it is specifically suitable for your needs
- if using a third-party intermediary, ask for references from other similar customers
- include all additional costs on the original written quote – if additional services are requested, the quote must be reissued
- provide refreshed quotations on request
- provide information on when they will provide smart meter installations to your school and what consumption information and data they can provide you with – there should be no charge for standard replacement of smart meters, as this is met through the standing charge
When taking out a new agreement with a new or existing supplier, you should:
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Ensure you have the correct internal approval, that the procurement is compliant and that it meets your needs.
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Arrange in advance internal approval.
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Provide correct termination notice on the existing contract.
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Ensure any outstanding debts are paid.
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Make sure that the correct rate of VAT is applied and ask your supplier for a VAT declaration form if a change VAT status is required.
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Meter readings are advisable for the last date of supply from the existing supplier. These can be submitted via the current supplier’s internet portal. Ideally, take a photograph of the meter face.
Remember:
- unless it is a fixed rate contract, the actual energy cost is not confirmed before the energy supply start date
- only work with written quotes
- be mindful of what quotes do and do not include – make sure you are making a valid comparison of the services you are receiving
- set a reminder to review energy contracts in advance of renewal
- it is never too early to review your energy contract, the get help buying for schools service is available to help
Deemed contract rates or out of contracts rates: these apply when a new energy supply is installed prior to a contract being agreed or your current contract ends without a new contract being in place, but the supplier continues to supply energy. The energy charge rates will be a published tariff charge as stipulated within your current contract terms and conditions.
Third party intermediaries (TPI): are organisations or individuals such as public buying organisations or brokers that provide advice or services to buy energy from 2nd tier licensed electricity suppliers and gas shippers.