The Committee considered a report on progress relating to the tender to find a suitably qualified and experienced partner to roll out an on-street Electric Vehicle (EV) charging programme within Reading. The report also sought delegated authority from the Committee to authorise the Assistant Director of Environmental & Commercial Services, in consultation with the Lead Councillor for Climate Strategy and Transport, the Assistant Director of Legal & Democratic Services and the Director of Finance, to enter into a 15-year contract with the successful bidder (with a possible one-year extension) to deliver EV charging in the borough.

The subject of the tender was the provision of a network of EV charging infrastructure across the borough that would support the delivery of the Council’s EV Charging Strategy (a key aspect of the Council’s Local Transport Plan). The key objectives of the EV Charging Strategy included increasing public EV charging provision to ensure the uptake of EV technology was not constrained by a lack infrastructure and to ensure that that same infrastructure was appropriately distributed to ensure equitable access across the town.

The report summarised the procurement process and explained that the Council had completed stage one of a two stage open procurement process and had shortlisted five experienced contractors to return tenders. The successful tenderer would be required to enter into a contract with the Council to install, operate, and maintain at least 1,500 standard-speed on-street EV chargers, across the town, primarily utilising the existing lamp column power network. In locations where the lamp column power network could not be used, the contractor would be required to install alternative power and charging apparatus.

The report stated that a long-term contract of up to 15 years, with the option of a one-year extension, would be entered into to ensure financial security for both the Council and the successful bidder. The contract would include protections for the Council should the contractor go out of business, that would allow the Council to take over the assets and seek to award a contract to an alternative provider.  At the end of the contract the Council would be in a position to either have the units removed by the contractor or seek another suitable contractor via an open procurement process to take over the running and maintenance of the assets.

The successful bidder would be required to secure suitable funding themselves either privately or through the Charging Infrastructure Investment Fund (CIIF), to deliver the installation programme over a two-year period. The project would not require capital funding from the Council but would utilise £766k of the £866k of LEVI (Local Electric Vehicle Infrastructure) Grant funding that the Council had already secured from Government. The remaining £100k from the secured LEVI grant fund would be retained to support resident applications for cross-pavement EV charging solutions.

The successful bidder would be expected to cover the risks associated with the delivery of the scheme, including bearing the costs of any on-street charging units that did not achieve the expected usage. Tenderers would be also required to demonstrate social value and a strong commitment to carbon reduction principles within their submissions. The Council would agree the successful tenderer’s delivery programme to ensure that the Council’s priorities were met, including enhancing opportunities in socially deprived areas of the town and achieving the best possible price per kilowatt hour for residents who would use the charging points. 

The report stated that, whilst the estimated income over the lifetime of the contract fell below that where Committee approval would normally be required, delegated authority to authorise officers to enter into a contract with the successful bidder was being sought from the Committee as the potential total value of the concessionary contract with the provider could theoretically reach over £190m over the 15-year lifetime of the contract. The report explained that an annual rebate of £65K (increasing annually in line with RPI) had been mandated to cover the cost of a contract manager. The rebate would commence in April 2027 after LEVI capability funding for the LEVI project lead had elapsed.  The Council had set a gross margin share (revenue minus cost of energy) rebate rate of 3% that it would receive if or when income met or exceeded the £65K (plus RPI) mandatory annual rebate payment figure. Therefore, the Council’s direct revenue costs would be completely covered.

Tenderers would be required to detail their approach to tariff pricing within their respective bids, including setting an appropriate tariff ceiling (the current prices for Electric Vehicle charging within the tender returns ranged between 39p/kWh and 85p/kWh). Tenderers would also be required to submit a transparent cost model detailing how their tariff figures were calculated. The successful tenderer would be permitted to request an increase to the tariff ceiling twice a year under the change mechanism in the contract. Any tariff increase would need to be supported by an up-to-date cost model and provide appropriate benchmarking figures to evidence why a price increase was required. It was anticipated that the successful tenderer would need to carefully consider any increases to its tariffs in order to remain competitive with other providers.

The report explained that at years 5, 8, 10, and 12 of the contract the Council could opt to review the gross margin share rate. This gave the Council leeway to make adjustments if necessary. Additionally, if annual income surpassed the £65K mandatory rebate figure the Council could choose to decline to accept the extra revenue and instead channel those funds towards community benefit (eg lower tariffs or expanded infrastructure). The checkpoints were therefore not just financial but offered strategic moments for the Council to evaluate the contract’s overall effectiveness, including value for money for residents.

Resolved –

(1)           That the progress made towards the tender to find a suitably qualified and experienced partner to roll out an on-street Electric Vehicle (EV) charging programme within Reading be noted;

(2)           That the Assistant Director of Environmental & Commercial Services, in consultation with the Lead Councillor for Climate Strategy and Transport, the Assistant Director of Legal & Democratic Services and the Director of Finance, be authorised to enter into a 15-year contract with the successful bidder (with a possible 1-year extension) to deliver EV charging in Reading.