PFI contractors could be left to foot energy fines

Worried PFI contractors have contacted the Treasury over fears they will become liable for thousands of pounds of penalties under new environmental legislation.

Under the terms of the Carbon Reduction Commitment (CRC), which penalises companies that do not reduce carbon emissions, the organisation that pays a building’s energy bills is liable for penalties even if it is not the tenant. The legislation will be introduced in April 2011.

On PFI schemes, the bill payer is often a facilities management firm or the PFI vehicle as a whole, which would affect contractors with an equity stake.

The CRC will force companies with bills greater than £500,000 to buy credits based on electricity use at £12/tonne of carbon dioxide. Buildings are then placed in a league table based on their performance. This can lead to a bonus or penalty.

A spokesperson for PFI contractor Carillion said: “The principle here is whoever is responsible for energy use ought to pay for it. It would be bizarre if you were required to pay your next door neighbour’s energy bill.”

Sam Dibble, energy manager of FM company Serco Health, added: “Who will collate and submit the information? Who will get penalised? We haven’t got a definitive answer to that yet.”

The government has commissioned PFI agency Partnerships UK to examine 15 to 20 PFI contracts to determine responsibility for the CRC.

Few PFI contracts were drafted to cope with passing energy costs down to the occupant. Georgia Elliott-Smith, director of sustainability at consultant Appleyards, said: “For many PFIs it’s a matter of luck depending on how contracts were written.”