Energy Procurement

Energy markets are becoming ever more unpredictable and traditional methods of purchasing, such as fixed price contracts are becoming increasingly risky. To manage this volatility, WME's market specialist monitors market prices and key drivers on a daily basis enabling us to purchase both gas and electricity when the price is right.

Our key offering which is undertaken by the majority of our customers, is fully flexible procurement. This has been designed with our customers at the forefront. Our market research has found that financial priorities within the public sector tend to be for long term risk management and budget certainty, as delivered through our innovative, risk managed strategy.

Fully Flexible Procurement:

Fully flexible procurement allows for complete flexibility when buying your energy. Our market analysts monitor the market conditions and drivers and make daily decisions on whether to transact within the market, which will include decisions to buy or sell energy to try and secure the lowest possible prices. This lowers the risks associated with energy procurement, as it spreads the buying window over a longer period of time.

Budget certainty is delivered to customers through an innovative capped price mechanism.

Our capped price gives a maximum price per kWh that our customers will pay for the next financial year. Once the price is set, our fully risk managed strategy allows us to continue to trade energy within the financial year where we are able to secure benefits should wholesale prices drop. Where we secure gains from the market, we pass these back to our customers through discounts off the capped price throughout the year. If wholesale prices increase through the year, customers are protected by our capped price.

Benefits of flexible procurement:

• Reduced risk – Energy positions are hedged over a long period of time and energy bought at the best market conditions, rather than on one day
• Able to take early action to reduce exposure to higher energy prices in future years
• Opportunity to take advantage of falling market prices
• Option to trade within year, or ahead of year
• Budget certainty offered through capped price

Our energy procurement is supported by a third party consultant and governed by our ‘flexible energy advisory panel’ which is made up of representatives from our four member authorities.

Fixed Price Procurement:

Fixed price procurement allow us to procure all of your energy for the duration of your contract on one given day and lock the price down along with the associated non-commodity costs. Whilst this strategy offers complete budget certainty, it is high risk as you are at the mercy of wholesale energy prices on one given day of the year.

WME have a fixed price, fixed term framework in place which allows us to go out to several chosen suppliers for gas and electiricty utilising mini-competitions.

Benefits of fixed procurement:

• Complete budget certainty as you know your exact price for the duration of your contract
• Mini-competition compares prices of several suppliers at once
• Price protection against possible rising market prices, although this can be a negative if wholesale energy prices reduce

All WME supplier contracts are awarded following a fully OJEU compliant procurement process.

For further information and supplier Terms and Conditions click here