This is a message to schools about entering contracts with a company called 'Electricity Direct'.

These are five year agreements. There are penalties for breaking early and also ED can object to the regulators if you try to change and make life very difficult. ED appears to give no undertaking to ensure a continuation of good prices. Electricity prices are falling at the moment.

They do not send periodic bills - there is only a reconciliation at year end and this is difficult to get out of them. The non availability of consumption data makes it impossible for schools to manage their consumption eg to spot where meters are going wrong or what ever.

The reconciliation of the first year will often reveal that the direct debit which has been paid is inadequate by as much as 25% of the annual cost. When you work out their initial contracted rates, it is obvious the DD payment was too small.

Finally Electricity Direct do not appear as cheap as ESPO. This will obviously vary from school to school but all schools are advised to get a benchmark report from ESPO before they sign up to anything other than the ESPO contract.

The Corporate Purchasing Unit is continuing to pursue the information schools sent in. A number of schools are with TXU but not on the cheaper ESPO terms. We will be following all these situations up with the schools concerned. There are still some schools who have not sent in their returns - it would certainly be in their interest to do so if they do not source all their energy with ESPO.

Wendy Baker, Contracts and Purchasing Manager

Corporate Purchasing Unit

Phone 01603 223861

Fax 01603 222820