New not-for-profit energy company to sell cheaper energy to 200,000 homes in Scotland

A new not-for-profit energy company aims to sell cheaper energy to around 200,000 homes across Scotland.

Our Power Energy, which would launch with 35 founder organisations, including housing associations and local authorities, looks to enter the energy market by the end of the year as an Ofgem-licensed gas and electricity supplier.

It would slash utility bills across disadvantaged communities by up to 10 per cent as against standard commercial tariffs.

According to the company's projection its buying power would help communities save up to £11 million on utility bills over the next five years.

The Scottish government would back the scheme with £2.5-million loan.

Additionally £1 million would come from Social Investment Scotland.

Scottish Social Justice Secretary, Alex Neil, said, ''Fuel poverty is at its highest level in a decade with fuel prices having risen by an inflation-busting seven per cent between 2012 and 2013.

''A recent investigation by the Competition and Markets Authority (CMA) found that millions of energy customers are paying too much for their energy bills.

''That is why the Scottish Government has invested £2.5 million in Our Power.

It will be the first independent and fully-licensed energy supply company registered as a non-profit distributing organisation owned by its members.

''This ground-breaking company will make a real difference to tens of thousands of low income households who are currently disadvantaged in the energy market and struggling to pay their bills.''

The company would enter the market at the end of 2015 as an Ofgem-licensed supplier of gas and electricity.

Alastair Davis, chief executive of Social Investment Scotland, said, "Fuel poverty is a major issue for many households throughout Scotland. However, by removing profit from the equation, Our Power offers a new way of tackling this problem."

In the future, the company hopes to develop renewable energy projects as part of its business, to benefit local communities.