At a time of heightened interest in the appropriate use of power – given the increasing concerns over carbon emissions and climate change – it would seem a good time for not-for-profit organisations to review their use of electricity. Is power being wasted, for example, by leaving PCs or lights on all night needlessly, thus adding to the organisation’s carbon footprint?

It turns out that it might also be a sensible time to look more closely at power use for bottom line financial, as well as ethical, reasons. Charities may be missing a trick here in not rigorously shopping around for bargains on this front – odd since as householders we may seriously think about switching gas or electricity suppliers on a regular basis. Indeed some estimates claim as many as 80 per cent of organisations of all sorts pay too much for their electricity, gas, water, telecomms and other utilities.

The price of UK gas and electricity has doubled in the past two years (other estimates put the increase at 35 to 60 per cent), so it’s no surprise that organisations of all sizes have seen some pretty brisk increases in their bills. Energy prices are now falling again, at least for the moment, so there are better deals to be had.

“Organisations we work with are often genuinely surprised at what can be achieved here,” claims Donald Maclean, managing partner at consultancy, Audits Unlimited, that specialises in helping firms cut their utility bills. The company works with a range of charities in Scotland such as the Richmond Fellowship, and overall claims its clients can cut their costs in this area by as much as 10 to 20 per cent annually.

How are such savings achieved? According to Maclean and other experts, it’s all down to detail as well as being much more hard-nosed with suppliers than it seems many charities are. “We take a firm’s utility bills, scan them into the computer, and log all the data,” he explains. “We then build up an accurate profile of what is being actually used and how much spent. A big part of this is spotting supplier errors. It may sound surprising but we probably find problems with bills on a monthly basis.”

Getting such often-unnoticed slips corrected is only part of the deal, though. “A lot of this depends on contract negotiations around changing suppliers,” he continues. “It’s very important to keep shopping around here and resist being tied in to any supplier for whatever reason.” Other techniques include consolidation of suppliers’ bills to save on admin and increase visibility of costs. As an example, the company claims that for one client it managed to slash the number of incoming utility bills from 1,200 to 12.

One charity that has taken the company’s advice is the MS (Multiple Sclerosis) Society Scotland, which has been working with Audits for over three years to try to identify cost savings in its energy consumption. The good news: it says it has saved 22 per cent in gas and electricity costs and 25 per cent on LPG (liquid petroleum gas) alone in the first year, with savings of over 15 per cent in subsequent years.

A lot of this sort of energy cost saving is plainly down to better management of the relationship between you as a customer and the market. More technologically-oriented solutions are also out there, however. For instance, a company called Qonnectis offers an approach called automated meter reading (AMR) technology.

This lets utilities and their business customers (including NFP organisations) achieve significant cost savings through more efficient operation of their networks, as well as improved energy and water conservation through leakage detection and prevention. In one such example in the public sector the devices helped the Gwent NHS Trust spot a water leak at County Hospital in Griffithstown whose blockage saved over £60,000 on its annual water bill.

Ultimately, however, it all comes back to the way the utility market works now and is likely to evolve in the future. Charity managers need to realise they are dealing with a market, and one that is highly volatile: “Purchasing energy is unquestionably complex due to the number of variables involved, with multiple rates, pricing structure tariffs, and varying numbers of suppliers,” points out Gary Worby of another consultancy in the utilities auditing business, EnergyQuote. “The energy supply market is evolving from a wholesale pooling arrangement to a spots and futures market.”

In practical terms this means that you as a buyer need to evaluate whether a variable-priced contract would be better for you than a fixed-price for the entire year. Worby thinks the decision may be connected to the size of your organisation: “Variable contracts are only really suitable for larger companies who have more experience, and the necessary time and support to deal with the extra work involved.”

The question is whether you have that time and knowledge to make this sort of decision. If so fine, but if you go to the wider market to get advice be aware that, just as with financial advice, many brokers in the field (apart from specialists like Audits Unlimited) may have preferable arrangements with existing suppliers – so check.

The time does seem ripe to make sure you are getting the very best out of your utility bills – while it may be too late to make this a New Year resolution, it is still a worthy aim for 2007.

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Energy saving tips

Charities and not-for-profit organisations are treated as businesses and so are subject to annual energy contracts, unlike households which can switch at any time. Nonetheless there are some ways to cut that power bill and save cash:

Climate Change Levy exemption

The Climate Change Levy – at almost half a penny per kilowatt you use – is avoided completely if you are a registered charity. Signing-up to a green tariff, incidentally, can often work out as cheap as any other deal.

Get on a contract

A third of all UK businesses are not on an energy contract. This means they are subject to regular price rises, of up to 40 per cent. With prices rising, a fixed-rate contract freezes your rates for up to three years, saving you money. PS don’t believe suppliers who tell you that fixed contracts no longer exist.

Immediately serve notice on your supplier

Keep track of when your contract is up for review as there are sometimes catches like stipulating you need to serve three months to one year notice. The best way to avoid this is to send a letter immediately and save it as proof so you have all your options open when it is time for renewal. Given that your current supplier knows this, they will also have to offer you competitive rates to stay.

Shop around

With over 30 different gas and electricity suppliers all offering different rates and pricing structures, there is a perfect plan for you out there. If this sounds too time consuming or tedious, you might want to consider an independent price comparison service.

Read the small print

Many suppliers make it difficult to change suppliers at the end of a contract. The most common ruse is for a supplier to send you an ‘assumptive renewal’ letter which rolls you on to a new contract automatically if you don’t object to it within a short timeframe. Most people don’t notice or are too busy to realise the implications of the letter. Worse still, some assumptive renewal letters are sent 120 days in advance when it is impossible to accurately shop around.

Give yourself time

Start to search for a new supplier at least eight weeks before your contract is due to expire. This allows enough time for you to get various prices and secure a start date that does not leave you out of contract.

Terminate cold calls

Cold calls about energy supplies are becoming a regular irritant and are unlikely to offer you the best rates in the market. Politely tell them to go away or – better still – register with the Telephone Preference Service (www.tpsonline.org.uk) to help deter unsolicited sales pitches in the first place.

See the light

Energy saving light bulbs use 75 per cent less electricity than standard bulbs, and yet they provide the same amount of light and last up to ten times longer. Any DIY or electrical shop should be able to advise you on choice.

Lower the temperature

Set the thermostat at 19°C when you have the heating system running. Costs jump by eight per cent for every 1°C increase. Storerooms, corridors and areas where there’s heavy physical work can be set to lower temperatures. Reduce heating during holidays and weekends.

Consult colleagues

Ask your staff where they think energy is being wasted, and for their ideas on saving energy. You might be surprised.

Tips source: Energyhelpline.com, a free service that handles enquiries on gas, electricity, landlines and mobile phones for over 10,000 businesses last year. Visit www.energyhelpline.com

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