Breaking the Mould

Do you use a Public Sector Buying Group (PSBG) to procure your energy? Are you responsible for procuring and reducing your organisation’s energy consumption and costs? If so then perhaps it’s time to move away from your existing provider. Public sector organisations can be reluctant to switch to another energy consultancy and will often renew their existing contract without even looking elsewhere. In addition, notice periods for getting out of a contract with a PSGB can be quite lengthy, often preventing public sector organisations from changing or moving contracts.

So what can you do to break the mould?

STC Energy believe that it is essential and good practice to benchmark energy consultancy fees with others in the market as it will help to ensure that you are receiving the best deal for the services you require.

Transparent Fees

It may appear unbelievable, but some public sector organisations do not know what they are paying their PSGB, as fees can be included in their energy costs. With much of the industry still using a commission based fee structure, transparency is key.

STC place a great deal of value on transparency to demonstrate value for money is being achieved. We offer an alternative fixed fee structure and ensure that all of our fees are understood by the customer from the outset.

Frameworks

Many PSGB’s only offer one utility supplier which could mean that your energy is not competitively priced or benchmarked against other suppliers. Other energy consultancy’s can offer a greater choice, meaning a utility supplier can be chosen based on your requirements and not just because that is the only option available to you. STC offer an OJEU compliant multi-supplier framework which gives public sector organisations the opportunity to choose from 12 utility suppliers.

Added Value
 
Energy consultants such as STC can also offer additional products and services in comparison to PSGB’s such as:

  • Bill validation - Fully managed utilities bureau service, invoice validation with tailored account payable files, query resolution and historic invoice audits.
  • Energy management - M&T, energy alerts, surveys, energy efficiency advice and sustainability reporting.
  • Site operations - Meter installations, full infrastructure management, supply alterations and meter operator contracts.
  • Profile alerts – Identifying and reducing energy wastage.
  • Budgets - Calculated at the individual meter level and combined to produce a single budget figure for each utility at each site.
  • Accruals - Providing each account and accrual value to allow easy transfer into your financial systems.
  • Refix – once you have agreed on a fixed procurement contract and the market price falls before the start of the contract, you can renegotiate the contract price with the supplier.
  • Sleeving - third party sleeving can help your business get better value for money from your electricity supply flexible contracts as it offers greater flexibility over how and when you fix your energy prices.

Challenges Faced by the Public Sector

Public sector organisations can often find themselves with an out of date portfolio making utilities difficult to manage. Difficulties often arise due to incomplete site lists, estimated utility bills and default unit rates. This leads to overpayments being made and utility invoices not being investigated fully. This is when issues tend to crop up, such as being billed for sites you are no longer responsible for.

Public sector organisations also face are often facing staff reductions and cut backs which can affect in-house expertise when looking to save energy and reduce costs. The solution to this issue is to have a consolidated portfolio and a customised outsourced bureau service.

The first port of call is to establish exactly what supply points are in your organisation (including water) and create a cleansed database of all utilities. This in itself can highlight opportunities for savings, such as identifying non-consolidated supplies billed on out of contract rates.

Bill Validation – Only Paying for What You Use

Many of the PSBG’s used by the public sector are purely procurement based and cannot provide additional services such as a fully managed bureau. The validation of utility bills is essential as it can highlight estimated consumption that could be higher than actual readings. STC are a leading bureau services provider and have recovered over £36m in utility billing errors in the last 2 years alone for our customers.

Suppliers’ contracts and invoices can be very complex and difficult to understand. As a result it is inevitable that some billing errors will be missed. With flexible and energy only contracts becoming a more popular way of buying energy, additional validation is required to balance reconciliation statements from suppliers and check the growing number of third party charges.
STC have been processing utility invoices for over 25 years and estimate that between 3% and 5% of utility expenditure can be saved by fully validating supplier invoices. Further savings can be achieved by reducing time spent by internal staff dealing with utility issues. This type of saving can often outweigh the cost of an energy bureau service, which should equate to less than 0.5% of the total utility expenditure.

We perform over 75 individual checks on every invoice processed. Our validation process is defined by strict quality controlled procedures to ensure that all billing errors are identified and corrected.

Once you have a cleansed portfolio and validated bills, analysis of the data can be made and savings identified.

If you would like to find out more about our services or what we can offer you in comparison to a PSBG, simply call or email Alan Little.

Tel: 
020 84662915

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