Portsmouth Council is pressing ahead with the closure of Victory Energy after failing to find a buyer for its supply company.
The south coast local authority announced yesterday that it is closing down the venture after two offers for the company fell through.
One was not acceptable to the council because it left the authority exposed it to ‘substantial further’ financial risk. The other was abandoned recently when the buyer withdrew to pursue an alternative investment.
Portsmouth has given notice to the directors of Victory that its ongoing financial support for the business’ operations is ceasing and that it will now work with them to support a managed wind-down of the company.
The company’s nine staff, who will be offered help finding alternative employment, have been issued redundancy notices.
Victory was set up by Portsmouth’s previous Conservative controlled administration in 2017 with the twin aims of providing low-cost renewable electricity to residents and generating revenue for the council’s coffers.
However, that decision was reversed following a Liberal Democrat take-over of the authority after last year’s local council elections.
The new administration mothballed the venture before it was up and running on the grounds that it was too risky.
Portsmouth’s Liberal Democrat leader Gerald Vernon-Jackson told Utility Week last year that he was concerned about the level of customers which the company would need to sign up in order to break even.
The council decided to dispose of the venture despite receiving a report from consultants PWC in November, which showed that it could generate a return of £63m over ten years of operation.