URL: https://democracy.croydon.gov.uk/ieDecisionDetails.aspx?ID=2631

Decision Maker: Corporate Director of Resources (Section 151)

Outcome: Recommendations Approved

Is Key Decision?: Yes

Is Callable In?: No

Purpose: The report sets out the strategy for the re-procurement of electricity and gas supplies for Croydon Council.   In order to align with this strategy, the report also seeks approval to urgently extend the Council’s Npower contract from January 1st 2026 to September 31st 2026. Failure to do so will result in the Council paying out of contract rates which will result a substantial increase (c£600k pcm). The report will also seek permission to extend it’s gas supply contract from April 1st 2026 – 31st September to align with the strategy as set out in the report.   This decision, to be taken by the Corporate Director of Resources, is to extend the Council’s utility contracts as described above. The decision on the strategy will be taken separately at a later date.  

Content: The report sets out the strategy for the re-procurement of electricity and gas supplies for Croydon Council.   In order to align with this strategy, the report also seeks approval to urgently extend the Council’s Npower contract from January 1st 2026 to September 31st 2026. Failure to do so will result in the Council paying out of contract rates which will result a substantial increase (c£600k pcm). The report will also seek permission to extend it’s gas supply contract from April 1st 2026 – 31st September to align with the strategy as set out in the report.   This decision, to be taken by the Corporate Director of Resources, is to extend the Council’s utility contracts as described above. The decision on the strategy will be taken separately at a later date.   To agree to an extension by way of variation of the current contract called off from the Laser framework for electricity with Npower for 9 months from 1st January 2026 – 30th September 2026) at an estimated value of £3,640k (please see appendix 1 for value calculation).   To agree to an extension by way of variation of the current contract for gas with Corona for 6 months (from 1st April 2026-30th September 2026) at an estimated value of £713k (please see appendix 2 for value calculation).     Securing a 9-month electric contract extension, securing a 10% reduction in costs against our previous arrangements.     Securing a 6-month gas contract extension takes advantage of the current low market prices and aligns our contract end dates with our electric contract, as well as entry into the October procurement basket.     The use of flexible wholesale framework contracts manages the price volatility of energy markets by purchasing forward demand for energy at different times, and in different amounts according to market conditions. Lasers October 26 PIA basket is their largest volume purchasing option – meaning Laser can forward purchase energy for next year during the Mar-Oct 26 period. The PIA flexible wholesale contracts offered by LASER are recommended as these have been developed through collaborative working with London boroughs. The frameworks allow direct award to suppliers who score the highest in the evaluation criteria which is the highest priority for the Council.    Using the Procurement Only Service Option (POSO) with Laser costs £34k a year, and we are also paying Concept Energy £25k to maintain a database of our bills. Moving to the fully managed bureau service with Laser will position us in the best way to resolve ongoing and future supplier issues, and ensure our utilities are managed as effectively as possible. Laser will provide all the services we receive through Concept, but with the addition of a direct supplier relationship, ensuring queries are resolved in a timely manner. We will pay Laser directly, and have a dedicated account manager, as opposed to dealing with the individual gas and electric suppliers.     The options for securing supplies of electricity and gas are set out in the table below.    Option  Description  Do nothing  This option is not recommended as it would result in the incumbent suppliers billing on ‘out of contract’ rates which are significantly higher than contract rates.  LBC lets own contracts  The council could issue its own tenders to secure new supply contracts. This option is not recommended as the council has insufficient volume of demand in its own portfolio to buy via a flexible wholesale strategy. In addition, the council would most likely face ‘take or pay’ cost penalties when the portfolio volume decreases due to estate disposals.  Access other public sector energy frameworks  CCS and regionally based public buying organisations offer frameworks with similar wholesale purchasing strategies to LASER. LEP had previously produced analyses of CCS and LASER wholesale price outcomes (as London boroughs purchase via both organisations). When comparing over rolling 3-year periods, both organisations were achieving similar levels of savings below market average prices.  CCS (and other buying organisations) only offer single supplier frameworks (where the top scoring provider across the cost/quality criteria is the only provider for that category).  Access LASER energy framework  LASER was established as an energy buying organisation for London and South East authorities. It maintains strong links and working relationships with the various cross-borough energy groups (such as the London Boroughs Energy Group and London Council’s energy projects). The new energy frameworks were developed according to the feedback and requirements of LASER’s existing client base (including the council).    None

Date of Decision: December 30, 2025