The LGA has warned South Australia’s volatile electricity market will impact on ratepayers through increased electricity costs for many councils from 1 January 2017.
LGA President Mayor Dave Burgess said LGA Procurement (LGAP) had recently negotiated new electricity supply contracts for participating councils for 12 & 24 Hour (Street and Traffic Lights) unmetered supply, and for Above 160MWh (large sites).
“2016 has been a particularly volatile year for our electricity market, and as expected, this was reflected in significant increases in both of these contracts,” Mayor Burgess said.
“The overall increase for the supply of electricity to large sites via the new Above 160MWh supply contract is around 29%, and for the 12 & 24 Hour supply it’s between a 30% and 50% increase, dependant on the individual circumstances and requirements of participating councils.”
64 councils have signed up to participate in the 12 & 24 hour contract, with 44 signed up to the Above 160MWh supply contract.
Both contracts will commence on 1 January and run through to 31 December 2017, coinciding with the completion of the Below 160MWh contract for small sites that was negotiated by LGAP in 2014.
Mayor Burgess said despite the significant increases in energy and supply costs, considerable savings were still achieved for councils and ratepayers by working together.
“With these two new contracts, LGAP negotiated savings of around 48% for the 12 & 24 Hour supply, and 15% for the Above 160MWh supply, based on the default energy supply rates available to councils,” Mayor Burgess said.
“Over the past three years LGAP has achieved more than $10 million in savings for councils and communities through the aggregated purchasing of electricity.”
“Unfortunately, rising electricity costs are one of the many pressures on councils which are out of their control.
“As the closest government to communities, councils understand their ratepayers are increasingly facing cost of living pressures, including rising electricity costs in their own homes.
“While we’ve got little control over the market, by working together as a sector we can mitigate the impact of rising electricity costs on council budgets.
“We’ve also opened up discussions with the State Government about aligning with their energy purchasing initiatives to realise greater savings; and we’ll continue to investigate other opportunities as they arise to achieve a better deal for our communities.”
LGA Procurement procures three types of electricity supply for the sector - large sites with consumption over 160 MWh per year, small sites below 160MWh per year, and 12&24 hour unmetered for public lighting.
Most SA councils have signed up to participate in these bulk purchasing contracts, which have saved ratepayers more than ten million dollars over the past three years through reduced administration costs for councils and competitive volume pricing.
The energy component of council electricity bills only comprises 40% of the total cost, with the remaining 60% being statutory and non-negotiable fees established by the Energy Regulator.