Report of Treasurer. [Report attached]

Contact: Duncan Whitfield.

That the retention of accumulated surplus of £1.594 million be approved.

That the distribution of accumulated surplus of £2.283 million, in accordance with the provisions of the Joint Agreement be approved.

Nigel Evans, Managing Director of West Mercia Energy, presented the Distribution of Surplus report and advised that the general fund balance stood at £3.877 million at 31 March 2026. He explained that £1.594 million would be retained as a reserve, allowing a surplus of £2.283 million to be distributed to the four member authorities in accordance with the Joint Agreement. It was noted that the distribution was around £100,000 higher than the previous year and represented the second-highest distribution in the organisation’s 13-year history.

During questions, a member asked about the impact of recent volatility in global energy markets and the role of renewable energy in the organisation’s operations. In response, Nigel Evans explained that West Mercia Energy had moved quickly to lock in energy prices after market instability in March, meaning that there was currently no exposure to market fluctuations for 2026/27. He also advised that established customers, including the member authorities, were fully protected for 2027/28. Regarding renewable energy, he explained that customers could opt to purchase Renewable Electricity Guarantees of Origin (REGOs) and that the organisation offered enhanced products where renewable certificates were matched with generation sources, adding that further green energy products were being developed.

Members welcomed the positive financial outcome. The Chairman commented that the arrangement continued to provide member authorities with competitive energy prices while also generating a significant financial return during a challenging economic period.

RESOLVED:

1.  That the retention of accumulated surplus of £1.594 million be approved.

2.  That the distribution of accumulated surplus of £2.283 million, in accordance with the provisions of the Joint Agreement be approved.