Lancaster City Council is looking into a new pilot scheme which could see householders cut their energy bills.
Known as “collective energy switching” the scheme, if approved, could see residents joining forces with the council to negotiate and take advantage of cheaper energy tariffs.
Similar schemes run successfully elsewhere in the country and Europe, and see energy companies bidding for the business of those that have signed up to take part.
The council said evidence shows that by residents joining forces in this way, energy companies are more likely to offer a lower tariff than would be available to individuals.
The city council’s cabinet is due to consider the proposal at its meeting on January 22.
Coun Eileen Blamire, leader of Lancaster City Council, said: “Over the last few years energy prices have rocketed to such an extent that all of us, and particularly society’s most vulnerable, are spending a high proportion of our income just trying to keep warm.
“One way which we can all reduce our bills is by shopping around and looking for cheaper energy tariffs, but that’s often easier said than done.
“Cabinet will consider proposals on whether to introduce a collective scheme, which would have the potential to help people switch to more competitive energy deals.”
Collective energy switching schemes are based on the principle of conducting an auction with energy providers to obtain the lowest feasible energy price; a process for which any household can sign up with no obligation. This enables consumers to benefit from reduced energy bills and, as referral fees can be claimed from energy companies, can be used as a means of income generation for the organisation leading the project, in this case the city council.
The scheme involves four principal stages. These include registration, which lasts around two months, an auction conducted over one day, acceptance of winning offers which lasts one month, and close out, which is the transfer of customers to new providers.
The more people that sign up the more likely suppliers will give an additional discount, but residents are not obliged to sign up to the scheme once a provider has been chosen, but those that do, could benefit from reduced bills.