We hope you are keeping well in these unprecedented times and are staying safe.
We hope by sending out this communication as early as possible it may help you plan / adjust your utility budget for 2020/21. Unfortunately in this challenging year we have to announce additional costs will be added to your March consumption, which will
be billed in April 2021.
There is no doubt 2020 has been a tough year for us all personally and within our work life, with a lot to contend with in terms of COVID-19 and new ways of working. Along with the pandemic we see other issues in the industry such as unprecedented demand
destruction across all sectors due to the lockdown restrictions, changes in working habits, furlough of staff, change of use of premises, etc.
As part of the YPO/ City of Bradford Metropolitan District Council flexible electricity contract through npower, the energy team at YPO buy and procure the energy on your behalf based on the estimated annual consumptions for your sites. This volume was bought
prior to the COVID-19 pandemic to an agreed purchasing strategy between YPO and Local Authorities. Since the Pandemic began, consumption dropped by around 25% at the peak of the lockdown restrictions back in April, although consumption has recovered since
then, this is still down on the normal consumption that is expected for the portfolio. Within energy contracts there are volume tolerances contained within them, for this contract this equates to 10% for the whole YPO portfolio, this means that at portfolio
level consumption can increase by 10% or decreases by 10% on a monthly basis with no sell backs are required. Until now, no sell backs to the market have ever taken place under this contract as consumption has always remained within these tolerances.
Due to the drop in consumption arising from the factors listed above there is a now a surplus of energy that has needed to be sold back to the market where outside of tolerances on a month-by-month basis, please note this does not affect Non-Half Hourly
(NHH) supplies. As a result of this additional costs arising from the difference between the volume purchase price and the sale price. Usually when demand falls significantly, this leads to prices in the wholesale market also falling which has caused the
difference in bought and sold price.
Currently the additional charge equates to 0.142p/kwh up to the end January 2021, which is less than 1% of total electricity price.
The City of Bradford Metropolitan District Council, YPO and npower pride themselves on being totally transparent with our customers. All parties have been in discussion throughout this pandemic regarding this and have done everything possible to avoid having
to do these sell backs.
As mentioned above these additional costs will be added to your March consumption, which will be billed in April 2021. The good news is that purchases of commodity for the next two years of the contract have been ongoing and YPO have locked in volume at
good prices for 2021/22 and 2022/23 whilst the market was favourable. We can also confirm that a January Sellback has taken place with volume sold back at a higher price than what we paid for it, although the difference is minimal, it is still a benefit to