The fate of a council-owned energy company that may face the chop before it is operational after costing tax payers £1 million is being decided today (10 August).
Victory Energy was established last year by Portsmouth City Council, with a view to making £2 million a year for the authority.
But following a change in the administration and to the “regulatory environment”, the company may be forced to close before it operates.
At 4.30pm this afternoon a council cabinet meeting will be held to decide the fate of the company, with four options on the table.
- Option 1 – To continue the council’s investment into Victory Energy Supply Limited under the current governance arrangements described in the cabinet report of the 29 July, 2017
- Option 2 – Cease investment into Victory Energy Supply Limited
- Option 3 – Continue the investment into the company, exercising robust oversight and governance with funding for each year subject to the approval by PCC of the company’s business plan for the forthcoming year
- Option 4 – Seek to enter into a white label agreement with an existing fully licensed energy supplier
Liberal Democrat leader of the council, Gerald Vernon-Jackson, previously told Utility Week he had concerns about how the company was set up, as well as its profitability.
He said: “My concern with this one is that it was set up by one party without getting support from all the other councillors. I think that is a worry and if we are going to continue with this we need cross party support.
“My questions around the business plan have been around the number of new customers the business plan says need to be acquired each year to break even. I am concerned about whether it is realistic to have a number of sales per agent that the business envisaged.”
PwC, which was asked to compile a report into the findings, has reportedly said the energy company can be profitable.
Several council-owned energy companies currently operate in the UK, with many partnering with the not-for-profit Robin Hood Energy, owned by Nottingham City Council.