Two entrepreneurs are launching a customer-owned energy firm to take on the big energy companies.
The venture, which is inspired by co-operative principles, requires a target of £370,000 and has already raised over £320,000 through crowdfunding.
Our Energy is led by David Pike and Karin Sode, a couple from Gullane, East Lothian, who say they want to get customers involved with launching the business to help make it a success.
Customers backing the business will receive 75% of the profits and be represented on the board. They will also have voting rights based on the principle of one-member/one vote, and receive free share ownership of the business within three years.
If they stay with Our Energy, they will be given free shares, which they can keep as long as they remain a customer. They cannot sell the shares to someone else.
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But while the company will have some co-operative inspired features, it will not be an actual co-operative.
“What we have in Our Energy is a hybrid combining elements of a co-operative with a traditional energy company, and we believe it marries the best of both worlds,” said Mr Pike.
The business will be set up as a private limited company for the first three years and then converted into a public limited company so it can issue shares to customers.
“It is easier to maintain a share register for a public limited company than for a private limited company.” said Mr Pike.
However, in order to become a public limited company, a business has to have been trading for two years and have £50,000 of issued share capital.
Asked why the co-op model had not been chosen, Mr Pike said they needed some of the 25% profit retained from customers “to create the robustness of the business. When energy prices increase we can have the reserves needed to met these demands.”
He added that the founders also wanted to have some return for their work on the project.
“The remaining 25% of shares will be distributed to customers after seven years,” he said.
A trained engineer, Mr Pike says the venture will be his last before retiring.
“We are delighted to have received backing from over 1,400 supporters who have raised more than £300,000 to ensure that Our Energy will become operational later this year,” he added.
“By attracting further funding, more customers can reap the benefits of a democratic and transparent energy supplier.”
The founders expect the business to be up and running by May.
Ms Sode said: “We have been amazed by the positive response we have had from people, not just through their pledges, but also in the many positive comments we have had.
“There is an absolute desire to change how essential services are provided to people in our communities. People are expressing a hunger to be part of a business model that returns ownership of a natural resource to them and is built on sharing rather than grabbing.”
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