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17 Aug 2010 04:08:02

Franchises included in CRC scheme

Business operating through franchises or that went bust during the recession are affected by the CRC energy efficiency scheme.

Under the CRC energy efficiency scheme, any company with a half hour electricity meters installed at the end of 2008 has to report its electricity meter details to the Government by September 30. Otherwise, they face fines of at least £500. Franchises and all those companies that have ceased trading since 2008 would have to register for the CRC scheme.

Although it has made a concession of £2,240 in fees it normally charges heavy energy users to take part in the CRC scheme, DECC requires qualifying companies that went bust since 2008 to register.

The CRC scheme also affects small-scale franchisors who are obliged to gather the energy consumption of all the independent businesses trading under the franchise if their collective consumption exceeds 6,000MW per year, or where one of those individual businesses uses a half hourly meter and the total exceeds 3,000MW per year. The Environment Agency states these businesses will need to include carbon emissions from all your franchisees as if they were carbon emissions from your own organisation.

The CRC scheme has three tiers. First, around 4,000 companies consuming more than 6,000MW of electricity a year have to register and pay a “pollution tax” of up to £100,000 a year for the amount they use. Of them, around 1,300 have registered. Second, those companies with a half hour meter that consume more than 3,000MW a year have to register their energy consumption and details but are not charged. Finally, smaller businesses that still have a half hour meter installed but use less than 3,000MW a year have to register their details. Failure to provide this information could incur a £500 fine.

DECC defended the inclusion of smaller businesses within the CRC scheme and the administrative burden it imposed. However, awareness of the reporting obligations among smaller businesses is limited. These businesses are likely to include small chains of hotels, restaurants and dry cleaners, often operating under franchise brands, as well as office or industrial unit landlords, small manufacturers and food processors, like bakeries.

A spokesman from DECC said: “It is estimated that making an information disclosure on the CRC registry will only take approximately 30 minutes.” She added that “The reason for requiring such organisations to register is one of data integrity - to ensure that all [meters] settled on the market have been accounted for; to enable the Environment Agency to audit effectively and thereby ensure that all organisation who should participate fully in the scheme have registered.”

The British Franchise Association had warned DECC that smaller businesses would be caught by the CRC scheme, but this advice was rejected to make sure that larger franchisors were included. The Environment Agency has said that as of Monday 16 August 1,398 of the 4,000 organisations that will take part in the trading scheme had registered, while 4,965 of the 15,000 information providers had registered.

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