BATH & NORTH EAST SOMERSET

PROCUREMENT OF UN-METERED ELECTRICITY FOR ILLUMINATED STREET FURNITURE

STREET LIGHTING

POLICY DOCUMENT 5

Economic and Environmental Development

Transportation Access and Waste Management

Riverside

Temple Street

Keynsham

Bristol

BS31 1LA

Policy5.doc

Issue 1

July, 2000

CONTENTS

SECTION DESCRIPTION PAGES

1) INTRODUCTION

Bath and North East Somerset Council recognises that street lighting is important to Householders, Parish Councils and Residents Associations. Not only as amenity lighting, but also for security reasons, in the reduction of crime, the fear of crime, and with respect to road safety as a measure to assist with the reduction of night time accidents.

The Council has a duty to ensure that all illuminated street furniture installations remain operational. One elements of this is to ensure the lighting remains connected to an electricity connection and is supplied with electricity at all times. Consequently a Policy for the procurement of electricity for illuminated street furniture installations has been approved to enable the Councils illuminated street furniture assets to remain lit at all times in line with this Policy.

This documentation has been produced by the Transportation Access and Waste Management Service of Economic and Environmental Development and was approved by the Transportation Sub-Committee of Bath and North East Somerset Council on 1 August 2000.

This Policy outlines the basic principles and standards that shall apply to the procurement of electricity for illuminated street furniture within the administrative area of Bath and North East Somerset Council. It sets out the aims of the Authority with respect to procuring electricity for illuminated street furniture, and the approaches it will take in order to achieve those aims. The overall objective is to ensure that competitively priced electricity is obtained for all un-metered installations situated upon the public highway.

The Main Aims When

Obtaining competitively priced electricity is to:-

· Ensure the most competitively priced energy is procured

· To Assist in promoting and maintaining the safety of all Highway users during the hours of darkness

· To Assist with the reduction of nighttime accidents

· To Ensure all illuminated street furniture assets remain lit to aid the police in the reduction of night time crime and the fear of crime

2) DE-REGULATION OF THE ELECTRICITY SUPPLY INDUSTRY

2.1 BACKGROUND

Prior to 1990 any customer wanting to buy electricity had to purchase it from the local Electricity Board, However, in April 1990 the electricity industry was reorganised. This opened the door to any customer occupying a single premises with a recorded metered demand over a Megawatt to shop around and choose their electricity supplier.

There were several options open at this stage to assist in opening up the de-regulated market. These included buying electricity at what was termed franchised rates, from Regional Electricity Companies (REC's) i.e. the standard tariff's. Alternatively by purchasing electricity at what was termed non franchised rates i.e. by tendering or negotiating rates.

The electricity 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 either a first or second tier supplier. First Tier suppliers were the REC's for their normal distribution area (eg SWEB) who were now permitted to negotiate and tender with customers who were located within their distribution area.

Second Tier suppliers were any supplier who held a licence issued by the office of electricity regulation (OFFER) to supply electricty any where 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 that 100 Kilowatts to shop around and chose their electricity supplier. These customers were now able to purchase electricity from a second tier supplier instead of the Regional Electricity Company (REC) as the first tier supplier.

The Councils total electricity consumption for all its items of illuminated street funiture is greater then 100 kilowatts this consumption is unmetered and therefore was in theory unable to take advantage of this further deregulation.

A national working group was formed which represented Councils, REC's, electricity suppliers and representatives from the Office of Electricity Regulation (OFFER) was established. This group developed a system that accounts for the scattered nature of street furniture and emulates an equivalent meter, therefore made trading within the 100-kilowatt market possible. This system was named the second tier un-metered supplies procedure and has ubsequently been refined and renamed to create the un-metered Supplies Procedure

2.2 UN-METERED SUPPLIES

To enable Council to procure energy within the Un-metered Supplies Procedure a number of requirements need to be met prior to obtaining prices for the supply of electricity these are:-

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

2) Enter into a Connection Agreement with the host RECs distribution business (Western Power Distribution formerly SWEB).

3) Providing the host RECs distribution business on a monthly basis an Electronic Inventory of all the Councils illuminated street furniture assets.

4) Setting up Photoelectric Cell Array units to closely monitor actual switching times of various time control devices.

5) Entering in to Load Research to establish the actual electricity consumption of different items of illuminated street furniture.

6) Obtain a Certificate of Un-metered Supply that confirms that the Councils electronic inventory is 98% accurate.

When all the above are in place it is then possible to seek tender bid's from licenced suppliers.

Once a supplier has then been appointed it is the supplier's responsibility to establish a Use of Distribution System Agreement with the host REC's distribution business. This enables the supplier to use the host REC's infrastructure to supply electricity to the customers supply points.

2.3 HOW THE EQUIVALENT METER OPERATES

2.3.1 Inventory

Each month an electronic inventory data file containing information for all illuminated street furniture assets is extracted from the illuminated street furniture management information system database. This file is sent to the REC where the data is read to establish details about each assets in terms of it's electricity consumption and establish any variations in terms of additions or deletions of assets from the Councils inventory during the preceding month. This data establishes the monthly total energy consumption for the Councils illuminated street furniture in terms of load in kilowatts (kW).

2.3.2 PECU (photo electric cell unit) Arrays

The electronic inventory data file provides information on the type of control device's that are used to switch the Councils illuminated street furniture assets on or off. These can be photoelectric cell's or time switch's. There are many different manufactures and types of control device's that operate in different ways, this results in the Councils illuminated street furniture switching on and off at different times. The timing of the switching has a significant effect on the amount of electricity consumed arising from the accuracy, tolerance and reliability of the different control devices that have been installed during recent years.

To establish accurate records for timing of switch on and off times for assets an indicative sample of typical control devices are installed within a photo electric cell array. This is a piece of equipment that has the facility for installing thirty different control devices and records the switch on and off times of each different type of device installed. This equipment is located on the REC's building in Bristol. A data file is produced from this equipment which accurate records switch on and off times on a daily basis which creates a daily electronic switching times data file.

2.3.3 LAMP (Local Administrative Metering Point)

The information contained on the inventory electronic data file is input by the host REC into a computer program for verification and the REC then forward the verified file to the Councils appointed Meter Administrator. The Meter Administrator then loads the verified data into a computer program called LAMP (Local Administrative Metering Point) this computer package combines the inventory data with the (PECU array) electronic daily switching times data files.

The purpose of this computer program is to calculate the electricity consumption of all the Councils items of illuminated street furniture by combining the inventory data with the daily switching on and off times. Once this task has been completed it is then possible to establish daily kilowatt-hour reading's. These reading are then used to calculate the daily consumption of electricity.

3) LEGISLATION

3.1 CITATION

Local Authorities must seek competitive quotations for the supply of electricity in accordance with the Public Supply Contract Regulations 1995 (SI 1995 No201). When ever their electricity purchase exceeds £144,456. The threshold of £144,456 is subject to regular review and this threshold is effective, until changed, from 1 January 2000.

3.2 SELECTION OF CONTRACT AWARD PROCEDURE

The Public Supply Contract Regulations 1995 gives Local Authorities three methods of procurement namely:- open procedures, restricted procedures and negotiated procedures. It is necessary for the Council to determine which procedure should be used.

Discussions were held with the Head of Legal Services during 1998 to determine the most appropriate procedure for the purchasing electricity for illuminated street furniture. It was felt that the Open Procedure should be adopted as this gave the opportunity for the most competition and this would result in the Council obtaining keener prices.

3.3 OPEN PROCEDURE

The Open Procedure requires the Council to publish a notice in the Official Journal of the European Communities (OJEC) which states that the Council wish to receive offers from suppliers.

The legislation requires that a minimum of 52 days from the date of dispatch of the OJEC notice is given to suppliers to consider the contract documentation and submit their offers. It is a further requirement of the legislation that the tender documents are dispatched to interested suppliers within six days of the Council receiving a request for the tender documents

3.4 TENDER EVALUATION AND AWARD

Contracts can be awarded either on the basis of an offer that is the most economically advantageous to the Council or is the lowest price.

As the contract for the purchase of electricity for illuminated street furniture is a contract for the supply of a specified product the contract is to be awarded on the basis of the lowest price.

It is permissible for the Council to reject offers if the supplier:-

a) fails to meet the Councils economic and financial standing requirements;

b) fails to meet the Councils minimum technical requirements for the contract;

c) fails to submit its offer in accordance with the Councils requirements.

4) TENDER PROCESS

4.1 INTRODUCTION

In order for suppliers to be able to make an offer for the supply of electricity for items of illuminated street furniture it is necessary for the Council to prepare tender documentation that sets out the Council's terms and conditions.

The tender documents comprise of the following components:-

a) Suppliers Questionnaire

The purpose of this questionnaire is to obtain information about the Electricity Supplier so that the Council can verify that the Electricity Supplier meets the Councils economic and financial criteria and the technical requirements of the Contract.

b) Instructions for Tendering

The instructions for tendering tells the supplier how they should complete their tender bid and provides 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.

This framework has been further developed to comply with the Councils Standing Orders and Transportation Access and Waste Management's standard accepted practices for the preparation 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 Un-metered Supplies, Connection Agreements for Highway Authority Installations, Meter Administration Agreements for Highway Authority Installation

d) Half Hour Load Data

This is information in the form of a computer file that contains data for every half-hour period (48) per day for 365 days of the year. This data is recorded daily within LAMP. By providing this information to the suppliers they are accurately able to establish the load profile and usage consumption of the illuminated street furniture assets within BANES for a whole year. This assists the supplier in matching their available supply with our required 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 requires 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) there are only a limited number of companies who can respond to the advertisements.

It is possible to obtain a list of current licence holders from OFGEM and it is therefore easy to contact all potential suppliers. Letters are sent to all licenced suppliers advising them that tender documents are available on request.

By taking this approach it is possible to contact everyone in the market place without the need to pay for expensive advertising. This approach results in cost saving of between £500-1,000 whenever 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 Suppliers Questionnaires is evaluated by TAWM and Resources staff to ensure that the suppliers meet the Councils technical and financial criteria.

4.4 AWARD

Whenever the contract for the procurement of electricity for illuminated street furniture is tendered, a report will be brought to the appropriate committee giving officer recommendations for acceptance. The recommendations will be based upon on the most competitively priced bid.

5) FREQUENTLY ASKED QUESTIONS

How do I get more information?

In the first instance you should contact the Engineering Consultancy, Street Lighting Section, within the Transportation Access and Waste Management Service of Economic and Environmental Development. These Officers are responsible for street lighting and can be contacted directly on (01225) 394263.

How is the equivalent meter read?

The meter is read by the use of dial up networking. The Council accesses LAMP via a personal computer and telephone line, this enables the equivalent meter to be read at any time and establish the electricity consumption.

How does the Council receive its electricity bill?

The Council receives its electricity bills in a paper format on a monthly basis; this identifies the total consumption per month that can be verified through reading the meter as identified above.

6) CONTACT LIST

CLIENT CONTACTS

Steven Howell, Head of Engineering Services 01225 394128

Tony Westgate, (Acting) Network Manager 01225 394160

Keith Showering, Senior Engineer, Highways Maintenance 01225 394342

CONSULTANCY CONTACTS

David Anderson, Engineering Consultancy Manager 01225 395239

Steve Moore, Engineering Project Co-ordinator 01225 394178

Peter Brunsch, Senior Project Manager 01225 394207