SOUTHAMPTON civic chiefs are to take on the 'Big Six' energy companies and offer cheaper options to their tenants.

The city council has unveiled plans for a new energy company which could cut residents’ annual bills by up to £200.

It is an innovative plan to sell gas and electricity to thousands of homes across Southampton as it aims to stamp out fuel poverty which affects 10,000 of the city’s households.

The first phase, approved by cabinet, will see the council working with an existing energy supplier under a ‘white label’ agreement where the council will supply gas and electricity under their Southampton council own brand.

Following this, the council would then look to become a licensed energy supplier and sell energy generated locally, including from its Westquay geothermal plant.

Council leader Simon Letts said: “Southampton residents need an alternative to the Big Six so we want to provide energy directly to them and cut out the middlemen.

“We have been talking to other councils about this and we thought this could be something that Southampton and parts of the Solent region could benefit from.

“We aren’t expecting to make a profit immediately, however, we will make a return and surplus on our investment.”

Originally, the scheme would be funded with £158,000 start-up costs from the Partnership for Urban South Hampshire (PUSH) fund after which it would be self-financing.

Cllr Letts expects the scheme will allow thousands of residents to save between £100-£200 on their bills with 10,000 customers expected in the first year with total savings for customers to top £4 million a year.

Cllr Dave Shields, cabinet member for health and sustainable living, said: “Our priority is to address fuel poverty in Southampton because of the heavy monopolisation of the Big Six energy companies.

“In other areas, the council’s brand is quite trusted so we can do something similar to have a cleaner and green city and work with other councils to provide energy from renewable sources in the future.”

Figures from price comparison service UK Power show that in Southampton alone customers spend more than £193 million annually on energy while the average gas and electric bill is thought to set back the average customer about £1,000 per year.

Liz Donegan, chief officer for Southampton’s Citizens Advice Bureau, said: “During 2015/16 Citizens Advice Southampton experienced an 11 per cent increase in the number of people seeking support for repaying fuel debts. These clients often have multiple debts and may juggle priorities leaving them struggling to pay bills for essential services.

“Local government is particularly well-placed to engage vulnerable consumers in the energy market.

“We would welcome initiatives that support local people, particularly the vulnerable.”

A recent survey by price comparison service Which? found that smaller energy firms including one’s owned by local authorities scored highly in key areas such as value for money and customer service.

Richard Headland from Which? said: “We have found the Big Six energy firms performing poorly and smaller suppliers leading the way when it comes to customer satisfaction. Larger suppliers need to urgently up their game in line with smaller providers.”

However, Royston Smith, MP for Southampton Itchen added: “The scheme in principle sounds interesting especially if there is a way to collaborate with other councils across Hampshire. However, it should be operated as a commercially separate entity from the council without the use of public funds.”

A similar scheme was set up in Nottingham in 2015 using energy generated from the city’s incinerator, solar panels and waste food plants.