Bristol Energy – what are they hiding?
Bristol’s taxpayers have sunk about £40million into trying to make a success of Bristol Energy Limited. I say taxpayers because the money spent by Bristol City Council all comes from households or businesses, one way or another. But we taxpayers were never really asked whether we wanted to take such a large punt in the volatile energy market. We don’t know how our money’s been spent, despite repeated attempts to find out by opposition party councillors. Mayor Marvin Rees is determined to keep it that way, presiding over an energy company where we are all kept in the dark. He and his Labour colleagues voted down a joint Liberal Democrat and Conservative motion that called for an independent inquiry into the company’s finances.
I wonder why the Mayor is being so secretive. What is he trying to stop us seeing? Nobody should reasonably expect him to be an expert in the complexities of the energy market. But we are entitled to expect our political leaders to have a care for the stewardship of our money in their hands. It’s been a concern of many people for a long time that Bristol Energy was haemorrhaging cash. Rather than a return on its investment, the city was propping up an ailing and maybe ultimately failing company. When did Mayor Rees become aware of this fact? Did he understand the scale of the problem? Did he pay due attention to briefings and warnings? Or was he distracted by more interesting stuff in his in-box?
Mayor Rees and I are both keen watchers of American politics, so I know he will be aware of this quote – “You campaign in poetry but govern in prose.” It was said by the former (and father of the current one) Governor of New York, Mario Cuomo. The speech was a warning Cuomo gave his fellow Democrats that you can have all the highfalutin language and soaring phrases you like but the people expect politicians to work hard, study the detail and act to make a difference. Many of us have sat through a speech from Rees and wondered what it all meant. Anyone watching Rees at Mayor’s question time in City Hall will have cringed at the disdainful way he responds to both councillors and the public. This is a mayor who does not react well when challenged and appears to fear scrutiny.
Another well-known aspect of Rees’s behaviour is his taste for foreign travel. We have a city mayor who clearly enjoys globetrotting and one suspects has desires to be seen as a global figure. I’m not opposed to politicians travelling, I did some myself when in office. But the travel must have some purpose, to win investment for the city (which is actually the West of England Mayor’s job) or to learn some policy lessons to transform services in Bristol. Rees is actually in charge of several essential services in Bristol. The biggest, social care, is critical during the COVID crisis. But I suspect that Rees finds all this prosaic stuff about budgets and services rather dull. Much more fun to attend a global parliament of mayors.
Perhaps this is what the Mayor wants to keep from our eyes. That he was so busy travelling around the world and talking about illusory billions for an Underground that will never be built that he failed to act soon enough to stop the wasting of tens of millions at Bristol Energy. He managed to stop the true scale of the horror from emerging before the elections that were scheduled for May this year. Now the peoples’ verdict on his term of office has to wait till next year and by then we will surely know the full scale of the mess and what it’s cost us all. The outcome for Rees could be dire and maybe more people will conclude that it’s time to switch off the post of elected mayor too.
This article was originally published by Bristol 24/7 – https://www.bristol247.com/opinion/your-say/why-is-marvin-rees-being-so-secretive-about-bristol-energy/?fbclid=IwAR1ansCgqSwjHrMTVwMaOxyo54uDW-Oo6b_zFhfP68wvobyCfF1rSikUo_8
Stephen Williams' Blog 
These local authority-sponsored energy companies seemed like a good idea at the time, but I doubt that there is one that has succeeded. Surely it is time for Bristol corporation to pull the plug, with or without an Inquiry.
How did they seem a good idea?
The plan is to try and buy energy from generators and sell it on at a skinny margin in a very competitive market place. At the time OVO energy (similar business plan) were making a 2% margin and really struggling to turn a profit.
Even a Junior School maths lesson could have worked out the skinny margins and the amount of time to repay the initial investment. One thing the lesson wouldn’t have done is predict a profit by 2019 (originally it was supposed to be making a 35% NET profit by 2016)
The problem is at the outset the predicted NET profit margin was 35%. Just to put that in perspective energy resellers make around a 2% NET profit and the generators around 6% NET profit.
At the original scrutiny the only Councillor to query this 35% was a UKIP Councillor (the shame of it). I’ve tried several FOI requests to establish where this 35% figure came from and who sat on the original scrutiny committee. I’m sure you know a few Councillors Stephen, any idea?
The origins of the Bristol Energy company were pretty soundly based – it was not intended to be (a minor) player in the retail market. Rather, the original Lib Dem plan was for it to generate renewable energy from wind turbines, the city’s waterways and from PV panels on city buildings. This original mission would have provided sustainable jobs and helped tackle fuel poverty with a Bristol tariff. All of that was abandoned by subsequent administrations to chase margins in the volatile retail market. I always thought this was nuts. It would have been better to have done a joint venture with existing players nearby such as Good Energy, Ovo or Ecotricity. Sadly, propping up an ailing and failing council owned company was a mayoral vanity project.
I’ve had a quick look for the Lib Dems pre 2015 plan, be interesting to see it and how it might have performed over the last 6 or so years compared with Bristol Energy. The market has changed radically since 2015 for both the smaller resellers and the smaller generators. It would be interesting see where they projected the energy market would go in 2015-2020.
If it was small scale generators, I’ll go out on a limb and suggest it was based on incentivising local generators by offering a slightly above rate FiT with a generous 20+ year term and making a margin on the ever increasing FiT market and by 2020 we’d be making out like bandits on a 35% margin?
I don’t know the intricate financial details of the original proposal. All I know is that the company launched in 2016 had a business plan that differed radically from the original idea.