This report proposes to vary the Joint Agreement for West Mercia Energy (WME) held by the constituent authorities to enable WME to supply utilities, alongside the supply of energy.

The cabinet member for finance, housing and corporate services introduced the report. The government opened up the non-domestic water supply market in England in April 2017. The market in Scotland had been deregulated since 2008 and this was felt to have been successful in improving customer satisfaction while delivering savings. The report proposed changes to the joint agreement for West Mercia Energy (WME) to allow it to supply utilities alongside energy.

It was noted that the market was currently quite small and WME had closely considered whether to enter the market. Not providing an offer for water was considered a risk as competitors might offer a whole package, leading existing WME customers to change providers.

It was anticipated that the market would grow as potential suppliers developed their offers and more customers became aware of the deregulation.

The leader of the it’s our county group stated that WME should be looking to increase value in its core business rather than moving into the supply of water. He suggested that WME should explore options such as the supply of wood pellets which could be locally sourced and therefore support local businesses.

The cabinet member finance, housing and corporate services responded that expansion into the supply of water did not preclude exploring the options suggested but that WME had recommended expansion into water supply on the basis of approaches from current customers. WME could only supply to public sector bodies but was always looking at business possibilities. Installation of PV arrays on roof spaces was used to a small extent with industrial units. Changes in tariffs meant that this was only viable where the energy could be used close to the location it was generated. No customer demand for wood pellet supply had been registered but this could be explored.

The business risks of the new service were queried and it was explained that the risks referred to in the report related to the supply of water and related specifically to the decision at hand rather than a wider coverage for risk.

Resolved that:

(a)  the West Mercia Energy Joint Agreement be varied to include the provision to be able to broker and supply utilities; and

(b)  the Director for Economy, Communities and Corporate be authorised, following consultation with the Solicitor to the Council, to finalise and execute the variation.