LOCAL COUNCILS AND housing associations throughout Scotland are set to launch the UK’s first independent, non-profit energy distribution company.
The new company, Our Power Energy, will aim to save its members in the most disadvantaged communities up to £11million over its first five years.
Supported through repayable loans of £2.5million from the Scottish Government and £1million from Social Investment Scotland, the company seeks to tackle fuel poverty – which is currently at its highest level in a decade.
It comes just a week after the Competition and Markets Authority found that between 2009 and 2013 Scottish households paid out £1.2billion more than they would have had energy companies functioned in an effective manner.
Social Justice Secretary Alex Neil said: “Fuel poverty is at its highest level in a decade with fuel prices having risen by an inflation-busting 7% between 2012 and 2013.
“A recent investigation by the Competition and Markets Authority (CMA) found that millions of energy customers are paying too much for their energy bills.
“That is why the Scottish government has invested £2.5m in Our Power. It will be the first independent and fully-licensed energy supply company registered as a non-profit distributing organisation owned by its members.
“This ground-breaking company will make a real difference to tens of thousands of low income households who are currently disadvantaged in the energy market and struggling to pay their bills.”
Alastair Davis, chief executive of Social Investment Scotland, added: “Fuel poverty is a major issue for many households throughout Scotland. However, by removing profit from the equation, Our Power offers a new way of tackling this problem.”
Our Power Energy hopes in future to develop renewable energy project that will form part of its business for the benefit of local communities.
Similar initiatives are being planned throughout the UK with several English and Welsh local authorities working on plans to set themselves up as electricity and gas retailers – all promising to undercut traditional suppliers.