17 Jun 14

As announced at Talk Power Conference, EDF Energy launches contract for business to fix their prices for five years.

Water companies’ incomes are controlled by a cycle that agrees their earnings and investment over a set period. This protects consumers, gives investors greater certainty and ensures best management of the water network. However, previous to their new contract, South Staffordshire Water’s ability to fix their energy costs was limited by the availability of wholesale prices that matched their five year investment cycle.

The contract was signed in February 2014 for a supply starting in 2015 and runs for five years until 2020 when South Staffordshire Water’s next investment cycle finishes. The contract fixes the majority of the company’s electricity costs from the day of signature, giving South Staffordshire Water greater certainty of the majority of their energy costs. EDF Energy’s new approach takes South Staffordshire Water from relatively short-term purchasing to the more longer-term; smoothing costs for consumers.

Keith Marshall for South Staffordshire Water said “We believe that our customers can only benefit from this efficient approach. Electricity accounts for almost 20% of our annual costs, second only to salaries. We looked for an energy company that understood our purchasing needs and were willing to bring both their expertise and a competitive price to the table. This contract means South Staffordshire Water can better focus attention on energy reduction and carbon management rather than trying to beat the wholesale market. The team at EDF Energy worked effectively in partnership with our Legal and Energy teams to design this contract. They fully understood the challenges of forecasting for a five year AMP cycle and built a product for us that works."

Sid Cox, Director of the Business division at EDF Energy, said "We know that businesses are looking for ways to control costs and reduce risk. Businesses wanting to get long-term price certainty should follow South Staffordshire Water’s lead.

“Partnership with our sister company EDF Trading made this unique purchasing approach possible and I believe this industry first would also benefit other businesses that want longer-term price certainty. We are even able to offer prices out as far as 2024 from today.”