The Nottingham City Council in the UK will set up a new non-profit energy supply company by 2015 to supply gas and electricity through the national distribution systems.

The Nottingham Energy Supply Company is being set up by the council to do battle with the six big energy companies. The company will provide competitively priced energy tariffs that will lower customer energy bills, reduce local fuel poverty and increase Nottingham’s energy self-sufficiency.

It will also provide a competitive tariff to businesses to encourage growth in the city, provide a market for locally generated, sustainable electricity resources, and provide local jobs with employment at the company.

With the setting up of new company, more than 177,000 households across the city could benefit from cheaper energy bills – saving up to £120 per year, Nottingham Post reported.

To be run on a non-profit basis, any profit obtained by the company will be reinvested in the energy supply. The company will use power generated by the Eastcroft incinerator and also from solar panels, waste food plants and electricity and gas bought from the market at competitive rates.

In 2011, the Nottingham City Council had made a manifesto commitment to deliver a new, cheap energy tariff. To meet this commitment, the council is setting up the new licensed energy supplier for providing both electricity and gas to Nottingham residents and businesses.

The Nottingham City Council has sought a consultant to undertake the delivery of an energy supply licence and an energy supply company set up.

Obtaining the electricity and gas supply licence will allow the council to participate in the regulated electricity and gas markets. This will lead to greater control over locally generated energy and opportunities to supply both domestic and commercial properties with competitively priced electricity and gas. Ultimately, the delivery of the project will meet the council’s commitment of providing a cheap energy tariff to Nottingham residents.

Approval of £49,000 will fund the appointment of a consultant to undertake this study. The funding will come from Energy Development Fund.

The consultant will be responsible to complete an executive board report (first draft 27 March 2014 and final report on 8 April 2014) that provides a clear project plan and necessary considerations for obtaining an energy supply license and associated organisational structure to operate an energy supply company.

The consultant will also be responsible for liaising between the council and a chosen service partner during the early stage of setting up the new company and energy supply license. The consultant has to support the council in developing solutions that meet all necessary legal, financial, and compliance requirements.