Barking and Dagenham Council is set to formally underwrite B&D Energy's new contract with LASER, a move aimed at improving financial predictability for the council-owned energy company and potentially saving residents from increased costs.

The decision, discussed at a Cabinet meeting on Tuesday, 16 September 2025, will allow B&D Energy to transition from the council's corporate energy contract to a standalone LASER contract structured around an April PIA (Purchase in Advance) basket. This shift is intended to better align with B&D Energy's commercial model and reduce financial uncertainty. An alternative solution of not underwriting the contract was considered, but rejected because B&D Energy would not be able to transition to an April basket, exposing them to continued risk.

Currently, B&D Energy receives gas and electricity from the council's corporate energy tariffs, but this arrangement has created financial unpredictability. The proposed standalone LASER contract will enable B&D Energy to request forecast pricing from LASER in February, supporting tariff setting in mid-March, with final prices issued in April. This structure reduces exposure to winter volatility and supports more stable customer pricing. Councillor Geddes explained that this will enable B&D Energy to have a separate contract with LASER whereby LASER will let them know in April what the prices are in April, so the bills will go out from B&D Energy as accurate as they can be.

According to the Cabinet report, LASER requires the council to formally underwrite any financial liability arising from non-payment, a condition stemming from B&D Energy's relatively small portfolio size. The potential financial liability the council is underwriting is linked to non-payment, with the annual spend being approximately £850,000 for electricity and £1,500,000 for gas (based on the period 1 April 2024 to 31 March 2025), giving a total annual spend of approximately £2,350,000. However, council officials have emphasized that this underwriting reflects an existing exposure under the current corporate contract and does not introduce new financial risk.

Cllr Cameron Geddes, Cabinet Member for Regeneration & Economic Development, explained the rationale behind the decision. He said the current system, where prices are announced in October but bills are set in April, creates a six-month gap that can lead to inaccuracies. The new arrangement aims to provide more accurate billing by aligning the pricing schedule with B&D Energy's operational model.

The new arrangement will be governed by written agreements between the Council, LASER, and B&D Energy, setting out payment discipline, reporting obligations, and escalation protocols. B&D Energy will continue to be invoiced directly by LASER, with all costs funded from its own budgets. The Council will monitor payment conduct monthly and report quarterly to the Shareholder Panel. The agreements will outline the specific measures to ensure B&D Energy adheres to the payment discipline.