Street Lighting

POLICY DOCUMENT 5 - PROCUREMENT OF UNMETERED ELECTRICITY FOR ILLUMINATED STREET LIGHTING FURNITURE

2) DEREGULATION OF THE ELECTRICITYSUPPLY INDUSTRY

2.1 BACKGROUND

Prior to 1990 any customer wanting to buy electricity had to purchase it from their local Electricity Board. However, in April 1990 the electricity industry was deregulated and this allowed customers who consumed over a Megawatt to shop around for an electricity supplier. Several options existed at this stage including buying electricity at franchised rates, i.e. the standard tariffs, from Regional Electricity Companies (REC’s) Another option was to purchase electricity at non franchised rates i.e. by tendering for or negotiating rates.

The market place was further complicated by the way in which suppliers of electricity were allowed to trade within the non franchised market. Suppliers were either classified as a First or Second tier supplier. First Tier suppliers were REC’s within their normal distribution area (eg SWEB) who were now permitted to negotiate and tender with customers located within that area.

Second Tier suppliers were any suppliers who held a licence issued by the Office of Electricity Regulation (OFFER) allowing them to supply electricity anywhere within the United Kingdom.

Further deregulation of the electricity supply industry took place in April 1994 when the non-franchised level of electricity consumption was lowered to enable single metered sites with consumption of greater than 100 Kilowatts to chose their electricity supplier. By purchase their electricity from a Second Tier supplier instead of the host Regional Electricity Company (REC).

The Council’s total electricity consumption for all its items of Illuminated Street Furniture is greater then 100 kilowatts but this consumption is unmetered and therefore the Council was, in theory, unable to take advantage of this further deregulation.

A national working group was formed comprising representatives from local Councils, REC’s, electricity suppliers and the Office of Electricity Regulation (OFFER). The group developed a system that took into account the scattered nature of street furniture and emulated an equivalent meter thus allowing trading within the 100-kilowatt market. This system is known as the unmetered Supplies Procedure.

2.2 UNMETERED SUPPLIES

Several requirements need to be met prior to obtaining prices for the supply of electricity: under the Unmetered Supplies Procedure. These are:

1) Appoint a Meter Administrator and enter into a Meter Administration Services Agreement.

2) Enter into a Connection Agreement with the host Distribution Network Operator ( Western Power Distribution in this area).

3) Provide the host Distribution Network Operator with a monthly electronic inventory of all the Council’s Illuminated Street Furniture assets.

4) Set up Photoelectric Cell Array units for monitoring switching times of time control devices.

5) Enter into Load Research to establish the actual electricity consumption of different items of Illuminated Street Furniture.

6) Obtain a Certificate of Unmetered Supply that confirms that the Council’s electronic inventory is 98% accurate.

When all the above is in place tender bids can be sought from licensed suppliers. Once a supplier is appointed it is their responsibility to establish a Use of Distribution System Agreement with the host Distribution Network Operator. This enables the supplier to use the Distribution Network Operator’s infrastructure to supply electricity to the customer.

2.3 HOW THE EQUIVALENT METER OPERATES

2.3.1 Inventory

Each month an electronic inventory is prepared using the Illuminated Street Furniture Management Information System database. This inventory is sent to the Distribution Network Operator who checks the information against the previous month for any differences in consumption or numbers of assets. The data thus obtained establishes the monthly total kilowatts (Kw) Consumption for the Council’s Illuminated Street Furniture.

2.3.2 PECU (photo electric cell unit) Arrays

The electronic inventory data file provides information on the control devices used to switch the Council’s Illuminated Street Furniture on or off. These devices are either photoelectric cell’s or time switches. There are many different types of control devices manufactured and they operate in different ways resulting in the Council’s Illuminated Street Furniture switching on and off at different times. The accuracy, tolerance and reliability of the different control devices have a significant effect on the amount of electricity consumed. The Distribution Network Operator’s building in

Bristol has a piece of equipment mounted on it that can record the on/off times of each type of device installed. The data file produced by this equipment accurately records on/off times on a daily basis and creates a daily electronic switching times data file.

2.3.3 Local Administrative Metering Point

The information from the inventory data file is input into a computer program called CALIBURN by the DNO and verified. The verified file is then forwarded to the Council’s appointed Meter Administrator. The Meter Administrator loads the verified data into a computer program called LAILOKEN which combines the inventory data file with the PECU array electronic daily switching times data files this then mathematically calculates the electricity consumption of all the Council’s Illuminated Street Furniture.

It is then possible to establish daily kilowatt-hour readings these are used to calculate the daily consumption of electricity.

4) TENDER PROCESS

4.1 INTRODUCTION

The Council tender documentation sets out the Council’s terms and conditions for the supply of electricity for Illuminated Street Furniture.

The tender documents comprise of the following components:-

a) Suppliers Questionnaire

This requests information about the Electricity Supplier so that the Council can verify that they meet the Council’s economic and financial criteria and the technical requirements of the Contract.

b) Instructions for Tendering

Tells the supplier how they should complete their tender bid and includes details of the tender return date and the address to which tender bids should be returned.

c) Contact Documentation

The framework for the tender documents for the competitive purchase of electricity for Illuminated Street Furniture was produced by a working party of Local Authority Street Lighting Engineers based in the South West of England. his framework was further developed to comply with the Council’s Standing rders and Transportation and Highways standard accepted practices for the reparation of contract documentation.

The contract documents contains:

i) the Conditions of Contract

ii) Specification

iii) Pricing Schedules

iv) Background Information such as profiles of monthly energy consumption, Certificates of Unmetered Supplies, Connection Agreements for Highway Authority Installations, Meter Administration Agreements for Highway

Authority Installation

d) Half Hour Load Data

This information is in the form of a computer file that contains data for every halfhour period (48) per day for 365 days of the year. This data is recorded daily by the PECU array and enables suppliers to accurately establish the load profile and usage consumption of Illuminated Street Furniture within Bath and North East Somerset for a whole year, allowing them to match their supply with our demand.

4.2 TENDER PROCEDURE

As mentioned in paragraph 3.1 due to the value of the contract it is necessary for the Council to comply with the Public Supply Contract Regulations 1995. The legislation requires the Council to advertise in the OJEC and to have a minimum tender period of 52 days.

Standing orders require that adverts be placed in the local and national press.

However, as legislation dictates that electricity can only be provided by companies who hold a licence issued by the Office of Gas and Electricity Markets (OFGEM) only a limited number of companies can respond. A list of current licence holders is obtained from OFGEM and letters are sent advising that tender documents are available on request in addition to the adverts placed in the OJEC.

This approach is more cost effective than expensive advertising resulting in a saving of between £500-1,000 each time the contract is re-tendered.

4.3 TENDER EVALUATION

Returned tenders are opened in accordance with the requirements of Standing Orders and all compliant offers received by the tender return date are considered. The information obtained from the Supplier’s Questionnaire is evaluated by Transportation and Highways and resources staff to ensure that suppliers meet the Council’s technical and financial criteria.

4.4 AWARD

Whenever the contract for the procurement of electricity for Illuminated Street Furniture is tendered, a report is brought to the Head of Transportation and Highways in order that discussions can be had with the Executive Member for Transport and an officer decision made on the award of the contract. The recommendations are based on the most competitively priced bid. Consideration will also be given to the cost effective use of energy provided from renewable sources.

6) CONTACT LIST

CLIENT CONTACTS

Peter Brook, Network Manager 01225 394339

Keith Showering, Team Leader, Street Lighting 01225 394342

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