Public energy company: outline business case

An independent outline business case for a national public energy company.


Item Meaning Description
Base Case This is the preferred solution as identified in the Economic Case. The financials of the Base Case are explored in the Financial Case.
Capital Expenditure Funds used by a company to acquire or upgrade physical assets such as land, buildings or equipment.
CBCS Community Benefit Company or Society
CLG Company Limited by Guarantee
CLS Company Limited by Shares
Commercial Case The Commercial Case asses the preferred delivery option, as identified by the Economic Case, and explores the potential corporate, legal and commercial structures available. It sets out the commercial options, funding approach and procurement strategies.
CIC Community Interest Company
Counterfactual Assesses the financial benefit of the proposed Public Energy Company against a calculated 'Business as Usual' or 'Do Nothing' scenario
COSLA Convention of Scottish Local Authorities The national association of Scottish councils that acts as an employers' association for its 32 member authorities
ECO The Energy Company Obligation scheme A government energy efficiency scheme in Great Britain to help reduce carbon emissions and tackle fuel poverty.
Economic Case The Economic Case appraises the options and determines the preferred solution based on the appraisal criteria set out.
Financial Case The Financial Case sets out to demonstrate the affordability and funding of the preferred option, it examines the benefits and costs of the Base Case preferred solution.
Financial Model A mathematical model, typically an excel workbook, designed to represent a simplified version of the performance of the financial aspects of a project. The Financial Model is developed to include the commercial structure and financing solution.
FPS Scottish Fuel Poverty Statement
Fully Licensed An energy supplier who is a fully licensed gas and electricity supply company, regulated by OFGEM. They must comply with all associated industry regulatory requirements.
HMT Her Majesty's Treasury
HMT Green Book Her Majesty's Treasury Green Book
IPS Industrial and Provident Society
Internal Rate of Return IRR Estimates the profitability of a project. It is the discount rate which makes the Net Present Value (NPV) of a project equal to zero.
LLP Limited Liability Partnership
Local Authorities Refers to the 32 local authorities in Scotland.
Management Case The Management Case sets of the project management, proposed timetable and governance arrangements from the OBC phase to the establishment of the Public Energy Company.
Nominal Prices The value of an item expressed in money terms at a specific point in time. This value therefore takes into account the impact of underlying inflation on the money value. This compares to Real Prices which removes the inflationary impact.
NPC Net Present Cost The total cost of a Project after taking into account the time value of money. In public sector investment appraisal, this would use the HMT discount rate (which starts at 3.5% for the first 30 years and then reduces from this point).
NPV Net Present Value The equivalent value of an investment today, taking into account cash flows and discount rates over the lifetime of the investment. In public sector investment appraisal this would use the HMT discount rate (which starts at 3.5% for the first 30 years and then reduces from this point).
OBC Outline Business Case An OBC sets outs the preliminary analysis, findings and plans for a proposed project. It contains information used for decision making on the next steps of a project.
Opex Operating Costs On-going costs of running a business or system.
Payback Period Amount of time taken for an investment to break even.
PPA Power Purchase Agreements A legal contract between an electricity generator and a power purchaser to buy/sell electricity at an agreed price.
Project The proposed Public Energy Company to be established.
Project IRR Project IRR represents the weighted average cost of capital for a Project. It is usually calculated from all of the non-financing Project cash flows, including capital costs, operating and maintenance costs, revenues and working capital adjustments.
Real Prices The Nominal Price adjusted to account for price inflation over time.
Risk Register A risk register is a risk management tool in which the risks of the Project will be identified and allocated to Project team members for monitoring and management.
Sensitivity Testing/ Analysis These are different scenarios run on a Financial Model to see what impact the scenario would have on the Project.
SOC Strategic Outline Case The purpose of a SOC is to present the case for change and assess the scope and feasibility of a project. A SOC was published in March 2018 for this Project so any references throughout are to this SOC.
SOLACE The Society of Local Authority Chief Executives and Senior Managers The members' network for local government and public sector professionals throughout the UK.
SMEs Small and Medium-sized Enterprises
SoLR Supplier of Last Resort An energy supplier who will step in to provide gas and electricity when a current supplier is no longer able to perform its function.
Strategic Case The Strategic Case outlines the strategic justification for a project and the drivers for change.
SVT Standard Variable Tariff A standard variable tariff is a supply contract with an indefinite length that does not have a fixed-term applying to the terms and conditions.
VAT Value-Added Tax
WHD Warm Homes Discount scheme Places a legal obligation on medium and larger energy suppliers to deliver support to people living in fuel poverty or a fuel poverty risk group.
White Label/White Label Agreement Contracting with an existing, fully licensed energy supplier to provide Public Energy Company branded gas and electricity to customers. There would be formal documentation in place detailing the full terms of the White Label Agreement between the third-party energy supplier and the Public Energy Company.
White Label Supplier In the OBC, any reference to 'White Label Supplier' refers to the third-party supply company which would be chosen to partner with the Public Energy Company to supply gas and electricity to the Public Energy Company's customers under a White Label Agreement.



Back to top