Starting around 2015 or a little earlier, various local authorities started to get interested in becoming energy suppliers on a "social", Not-for-Profit basis: how hard could it be? After all: cheap council capital; subsidised offices; no dividends to shell out; "no bonuses" to pay (well, no bonuses for the directors: you can't get experienced commercial energy staff without a bonus scheme) - we should be able to undercut the Wicked Big Six all the time! Easy.
The bollocks it is. And most of the local authorities that looked into it properly, and took proper advice, realised their error and quietly withdrew without spending too much to make it embarrassing. These included Sadiq Khan's London, and Nicola Sturgeon's Scotland (amazingly enough). Credit where credit's due.
But two councils wouldn't be stopped. They were Nottingham, which set up Robin Hood Energy, and Bristol (the imaginatively named Bristol Energy). Both were doomed from the start; though in zombie mode and each with access to council-taxpayers' money for a protracted series of bail-outs, they have both staved off the day of reckoning until now. Yes, you can suspend the laws of gravity for just so long as you are willing to through cash at it.
Bristol at least tried to do it somewhat professionally and organically, with some basic financial disciplines in place, and a target of being profitable within 3 years. The current mayor, an engaging moderate leftie (for whom I have some regard, actually) inherited it in 2016 and should have pulled the plug there & then. But hubris plus taxpayers' money somehow carried it all through until the cash calls and the write-offs became just too big. He called time a few weeks ago, and (as David Morris, one of our BTL regulars spotted) a buyer has just been found for the portfolio of business customers (for a pitifully small amount) - see comments under Monday's post. Based on the ugly fate of Cooperative Energy last year, it's my guess Bristol will actually have to pay someone to take on the rest of the obligations and the residential portfolio. Aside from the inevitable dissembling and secrecy from the mayor's office in the last few months of this doomed enterprise, Bristol wasn't conducted outrageously; just badly misconceived.
By contrast, Robin Hood Energy is a shocker. An outright leftie vanity project that boasted of having Corbyn as a customer, and of being the vanguard of a new wave of municipal socialism, Robin Hood was to be a NfP - a sure guarantor of being a stonking loss-maker, which it is. The prime movers were doctrinaire Momentumites; and if I tell you the Chairman of the Board of Directors (a councillor) was also Chair of the Audit Committee charged with monitoring the company on behalf of the council, you won't be at all surprised. Their USP was offering their services on a "white label" basis to a dozen other leftie councils (a ring of other pig-ignorant Momentumites - but at least with the nous to avoid becoming suppliers themselves, hahah!) the length and breadth of England. With this rapidly expanding but massively loss-making buiness model, Robin Hood has been bleeding the council tax-payers of Nottingham white (robbing the, errrr, poor to pay the, errr...). The statutory auditors have now called a halt, to much wailing and gnashing of teeth: it'll all get "sold off" quite soon (i.e., they'll pay someone to take it away). It's pretty comical - if you don't live in Nottingham, that is.
In the meantime ... a truly bizarre thing happened late last year. A very iffy, loss-making small Glaswegian supplier, Together Energy, somehow conned Warrington Council into paying the £18m for a half-stake in the company! (plus more millions in loans). What they hoped to gain from this is anyone's guess: and their Due Diligence must have been utterly perfunctory and conducted by a rather dull form of invertebrate life. It's so crazy, many would wonder if it was bent - except I think "crazy" is in fact the explanation. Not only are the books very odd indeed; but by mid 2019 the writing was on the wall for Bristol and Nottingham in large bold characters and no uncertain terms.
Here's the thing. Rebecca Long-Bailey, queen of the left, published a strategy still greatly lauded on the left, for nationalising all of energy and putting it into the hands of local authorities and indeed parish councils and 'local communities of at least 100 homes', all to be heavily unionised etc (we've written about this before). With these stonking examples of municipal idiocy, secrecy, incompetence and gross failure in even the simpler side of energy (being a supplier is a lot easier than running a distribution network, with a lot less at stake), WTF is she thinking? That's a serious question.
It ought to be a sober lesson for all: but we know it won't be.