Over the past few days, I have heard from colleagues on other councils across Scotland that the electricity companies are considering increasing very significantly the cost to councils of street lighting. Although it has yet to be finalised, I understand that Scottish & Southern Energy is looking at increasing its Distribution Use of System (DUoS) charges by approx 2.5pkWhr from 1.7p to 4.3p for unmetered customers.
The City Council’s Street Lighting Partnership tells me that this would add approximately £280 000 to Dundee City Council’s Electricity Bill.
I have great concerns about an increase of this magnitude – it is extremely high in relation to real inflation and comes at a time when the City Council like other local authorities is trying to finalise its budget for 2012/13. Such an increase has not been factored into the budget and I have therefore been in touch with the Director of Finance who advises :
“The latest proposed development which is being challenged has not yet been implemented or included in the Provisional Revenue Budget for 2012/13.
We propose to tackle this in 3 ways:
1. We are looking at possible spend to save initiatives to reduce our electricity burden on street lighting.
2. I am taking the latest proposals up with Procurement specialists to see if there is anything that can be done to secure a contract for this element of street lighting.
3. We do have a provision for increased energy costs of £603k in the Provisional Revenue Budget for 2012/13 along with £650k for general contingencies. At present we do not know what the actual impact of energy price increases will be but this is our best estimate.”
Speaking as the Leader of the Liberal Democrat Group on the City Council, my own comment is that it is very difficult to see any justification for this level of increase in charges coming at a time of great pressure on council budgets. DUoS is not part of the National Procurement Scotland Contract which only deals with the Raw Energy Element.
I think there is also an issue for the regulator OFGEM in that Scottish & Southern DUoS charges for unmetered Customers is by far the highest of any of the other 12 UK Distribution Companies thereby penalising local authorities in the North and North East of Scotland.