24 June 2004 | David Arminas
A university purchasing consortium has kept the rise in gas bills to below inflation in the sector's first e-auction for the commodity.
John Ritchie, director of the London Universities Purchasing Consortium (LUPC), said the price for the two-year deal rose by 33 per cent, despite an average gas hike of about 42 per cent.
The previous two-year contract for the LUPC's 19 members was worth £7 million.
"The prices bid reflect the total costs of commodity and service quality levels, such as checking invoices," he said.
The gas auction was based on the LUPC's e-auction for electricity in May 2003, another first for the sector, which cut £1 million from its members' combined £10 million energy costs.
The Energy Consortium (TEC), a non-profit organisation representing the majority of higher education institutions, conducted the e-auction with system supplier Utylix.
David Thomas, chief executive of TEC, said there were four suppliers in the bidding.
"This was not a bad number, but two suppliers bid only once. The same thing happened when we did the first electricity e-auction last year."
TEC plans another electricity e-auction for the north west and the north east of England, added Thomas, "but we are warning them that coming off two-year deals, there could be 40-50 per cent increases".
Feature: Tipping the balance of power