APPENDIX 22
Memorandum by Laser Group Members
In response to the Trade and Industry Fuel Price
Inquiry Notice, we would make comments/observations on behalf
of the LASER Group Members. LASER is a Local Authority Energy
Buying Group operated by Kent County Council on behalf of 68 Local
Authorities throughout South-East England. (Member Authorities—see
attached schedule).[33]
COMMENTS/OBSERVATIONS
1. For contracts commencing 1 November 2004
our members have incurred delivered price increases of up to 86%
for gas and 40% for electricity compared to contract prices secured
24 months earlier. These increases will inevitably cause budgetary
pressures, which may lead to an increase in Council Tax or a reduction
in services.
2. For Kent County Council the annual energy
expenditure, due to increased prices, has risen from £7.3
million (2003-04) to £9.4 million (2004-05).
3. One Leisure Centre Group is already planning
redundancies in part due to increasing fuel costs.
4. Competitive elements in the market are
being negated, as contract timing in a volatile market is a more
significant factor.
5. Purchasing strategies, demanding greater
expertise, are being assessed to seek options for mitigating dramatic
price increases.
6. Reported differences between Continental
Europe prices, have been at some 35% below UK traded wholesale
prices. The imbalance gives cause for concern that the markets
are operating effectively. In the past when Continental Europe
prices have been higher than those in the UK, flow of gas through
the inter-connector to the Continent has been cited as a reason
for rising UK prices.
LASER Energy Group
23 November 2004
33 Not printed. Back
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