Nottingham City Council has launched the first council-owned, not-for-profit energy company since the UK’s energy supply was nationalised in 1948.
The council hopes that its 'Robin Hood Energy' scheme will provide affordable energy to customers and help it alleviate fuel poverty. The council has been fully licensed nationally and so is offering tariffs to customers in England, Wales and Scotland.
The council estimates that those who already switched to Robin Hood Energy during its controlled market entry phase can save, on average, up to £237 a year.
Commenting on the launch of the scheme, councillor Alan Clark, Nottingham City Council’s portfolio holder for energy and sustainability, said: “The UK's domestic energy market has been hit with fluctuating government policies and subsidy cutbacks. In recent years, the cost of utility bills has spiralled as the profit-hungry ‘Big six’ energy companies have exploited their monopoly.
"We have decided to take the bold step of setting up Robin Hood Energy so that energy can be provided to customers across Nottingham and beyond at the lowest possible price, run not-for-profit but for people.”
The energy company will be run as a not-for-profit organisation with its directors not paid a salary. In addition, employees don't receive bonuses and the council claims that it has worked hard to keep overheads low for the energy company.
Energy for the tariffs will be procured directly from the National Grid via a Grid Master Trade Agreement. However, the company has faced criticism for not sourcing its energy from more sustainable sources. Reacting to the criticism, the council claims that the "primary focus of Robin Hood Energy is to provide affordable energy to customers", implying that supporting green energy would mean that the council would have to raise tariff prices. In addition, Nottingham Council claims that almost 15% of the energy used in Nottingham comes from low carbon or zero carbon sources.
The Competitions Markets Authority recently recognised that the UK's energy supply industry would benefit from greater competition, resulting in cheaper energy bills.