Gas independents fight for 350m council deal

Independent gas companies are vying to sign a joint marketing deal with a group of local authorities to supply gas to 184,000 council homes in the North-east of England.

It would be the biggest domestic deal signed by an independent gas company in the UK to date, and result in possible turnover of 350m a year.

Ten councils in the North east have put out a tender to gas companies.

Under the deal, the councils would recommend the gas company to their tenants and may become involved in joint marketing programmes with the supplier. They could also set up payment facilities.

The councils would charge the gas company a fee for the joint marketing.

The deal is being broked through the North Eastern Purchasing Organisation (NEPO), which puts together deals for ten local councils in the region, including Gateshead Metropolitan Council, and local authorities in Cleveland and Tyne & Wear.

NEPO purchasing manager Bill McNulty says: “There are two reasons for this deal. One is as an anti-poverty measure to improve the quality of life in the North-east. The other is to find a gas supplier for our owned and managed properties.”

But some gas companies may be reluctant to pursue the deal, as the tenants could include a high proportion of customers, who pay through pre-paid “key” meters. Some may also be on low-incomes and use limited amounts of gas.

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