Agenda item

Report of Corporate Director of Growth and City Development

Councillor Longford, Portfolio Holder for Energy, Environment and Waste Services introduced the report.

Dave Nicoll, CRES Customer Service and Transformation Manager, and Wayne Bexton, Director for Carbon Reduction, Energy and Sustainability, presented the report and highlighted the following:

(a)  EE Monitor Manufacture, Supply and Development

·  Nottingham City Council (NCC) owns and operates the largest district heating network in the UK. The network serves around 5,000 domestic properties and 120 commercial properties. 95% of the domestic properties on the network currently have an outdated prepayment solution installed, which is over 18 years old. Parts to repair the systems are now obsolete and the software is no longer supported. Customers only have a small number of shops in the area at which they can top up, and this is leading to them having to travel some distance to top up their prepayment device;

·  a decision by the Executive Board to bring Enviroenergy Ltd in to the Council recognised a requirement to upgrade this domestic metering and billing system, and funding was allocated within the Council’s capital programme, enabling commencement in 2022/23 to deliver this transition;

·  NCC has worked with a supplier to develop a prepayment metering solution for heat networks - this solution is called the EE Monitor, and has successfully helped other local authorities and housing associations across the UK to purchase and install the EE Monitor solution into properties they are the supplier of heat for;

·  the EE Monitor has become a commercial success since its inception, being fitted in 3,000 homes across the UK at present. As the demand for more heat networks across the UK grows, so does the opportunity for NCC to provide billing services alongside monitoring, utilising the expert teams within the Enviroenergy department. The EE Monitor is currently installed at Bentinck, Manvers and Kingston Courts in Nottingham and has proved a success;

·  there is now a need for NCC to procure the manufacturer, supplier and developer of the EE Monitor product on a long-term contract basis of 10 years, also enabling the roll out across the district heating estate within Nottingham (approximately 5,000 properties);

·  the existing prepayment metering system on Nottingham Estate is outdated and provides no control to us in managing debt and customer accounts;

·  benefits that the installation of an EE Monitor will have for our citizens and services are:

o  full control over customers’ heating accounts, enabling NCC to clawback existing debt and reduce the number of tenants who can get into debt;

o  better top up options;

o  tenants who require an engineer to manually top up their meter by £250 in order for them to not be allowed to get into debt should no longer require a visit from an engineer every few months;

o  Nottingham One and Victoria Centre have dedicated top up machines which are out of use and cannot be fixed due to requiring obsolete parts;

o  the EE Monitor device will offer all the options you expect to see in 2022, such as direct debit, online, over the phone and a card in any shop. The payments are added to the account instantly and automatically, which will allow tenants to be able to manage their heating accounts better.

(b)  Customer Relationship and Management System (CRMS)

·  the report is also seeking approval to procure a CRMS for a 10-year period to ensure Nottingham City Council can meet the regulatory requirements for ‘Heat Network Metering and Billing’ legislation. The current CRMS, known as DOMMS, is no longer fit for purpose and is running on the Microsoft Access system. The data within the system has become corrupted, making billing and account management very difficult. This leads to a delay in bills being sent to customers as billing is performed manually. The system doesn’t allow for customers to have an online account to manage their energy usage and check their balance;

·  benefits of a new CRMS include:

o  online customer account access;

o  multiple payment options;

o  automated billing;

o  monitoring of usage and payments.

Resolved to

(1)  to approve commencement of a tender process for both the manufacture, supply and development of the EE Monitor and the Customer Relationship Management System, at a cost of £3,579,000 and £3,200,000 respectively (a total cost of £6,779,000);

(2)  delegate authority to the Director of Carbon Reduction, Energy and Sustainability to award contracts for both items, in accordance with the Council’s constitution, to the successful bidders.

Reasons for recommendations

The current supplier has been engaged with NCC since 2015 in the production of a heat metering and billing solution. After the delivery of a successful prototype EE Monitor, the relationship with the supplier has continued. The sale of EE Monitors is a profitable business proposition offering a good return on sales and ongoing billing services. The EE Monitor is currently installed in 3000 properties across the UK. It is recognised as a very reliable cost-effective prepayment solution. It is recommended that approval to proceed with this tender is given and that the Director of Carbon Reduction, Energy & Sustainability has approval to procure and execute the contract in accordance with the Council’s constitution for this item after a successful tender process has been concluded.

The current DOMMS CRM utilised by Nottingham City Council’s Enviroenergy Department for their heat network customers is constantly failing and unable to produce bills. The system is Access based and previous attempts to “fix” the system have failed. The DOMMS system offers no online customer account capability and is very outdated. Customers have in some instances not received automated bills since 2014 due to the system failures.

Based on the value and length of the contract it is recommended that a tender exercise is completed to source a CRM solution offering best value. It is also recommended that the Director of Carbon Reduction, Energy & Sustainability has approval to procure and execute the contract in accordance with the Council’s constitution for this item after a successful tender process has been concluded.

Other options considered

Do nothing re EE Monitor – If we choose to do nothing, we will not be able to meet our targeted business growth and financial targets for EE Monitor sales. Nottingham City Council residents will face a complete failure of the prepayment metering infrastructure, meaning they may see a loss of the heat and hot water supply.

Do nothing re CRMS – If we do not source a new CRM, NCC is at risk of fines due to regulatory failures for not issuing a minimum of one annual statement per year to customers on the District Heating Network as per the Heat Network, Metering & Billing Regulations 2014 (Updated 2020). Customer billing is currently done via a manual process; this process is a time consuming process adding additional cost to the operation of the Nottingham City Council district heating network. An automated billing system will see a reduction in FTE time spent on billing of the equivalent of 1 FTE per annum.