That John Fox, managing director of streetlight specialists Lucy Zodion, is worried is an understatement. And the local authorities of the UK should be more worried than him. The problem is, many of them are not.

‘There are a lot of local authorities that simply don’t see it coming,’ he explains. ‘And they are going to be caught out.’

The ‘it’ is a change to Carbon Reduction Commitment (CRC). Since 2010 when it came into force, the CRC has contained within it a loophole, or technicality, that has meant local authorities have been able to avoid CRC charges on the energy used for street lights.

As of April 2014, that loophole will be pulled tight, and there will no longer be any escape from charges that will increase the average local authority streetlighting bill by 5%.

The loophole arose, says Fox, because the CRC was rushed through in the last days of the Labour Government.

‘There were a number of complicated areas related to supply of electricity, of which street lighting was one, and instead of holding the CRC up waiting to investigate those technicalities they left those areas out to be addressed at a later date, creating the loophole’ he reveals.

The exemption related to how a local authority paid for its electricity.

The only method of payment included in the CRC, and therefore liable to a penalty charge, from the off was dynamic half hourly, whereby costs were calculated and charged per half hour based on consumption information obtained from a central management system or a PECU Array. Exempt were the other methods, such as passive half hourly and non-half hourly, where consumption and tariffs were calculated based on general standardised information, such as published sunrise and sunset times.

‘Many local authorities opted to pay by a method that was not in the CRC,’ says Fox. ‘They were rushed into a decision and the dynamic method was very complex and very admin heavy and so for most local authorities it made sense to go for the easy fix and stick with the methods not in the CRC.’

This was bad news for councils in the long run, as it restricted both their ability to improve environmental performance and their flexibility to respond to rising energy costs.

Any measures to reduce energy usage on any payment method other than dynamic half hourly and you’d see no reduction in your bills – so there was no incentive to embark on a capital programme to make lighting more efficient, as there was no financial reward at the end to pay for it.

In the past, councils took the view that the 5% charge on the dynamic half hourly method could not be met and exceeded through energy saving schemes.

The closing of the loophole levels the playing field between the payment methods and suddenly the savings made on dynamic half hourly become the most viable option. And this will increasingly be the case, says Fox, as fuel prices are going to keep on rising.

‘We have undergone over the past few years a progressive and continuing rise in energy costs and there is evidence that in the future the cost of energy will continue to jump higher – one cause will be a number of nuclear power stations going offline in the next few years and the lack of a clear plan to replace their contribution to the market,’ says Fox. ‘So a more efficient system is going to be a necessity.’

Fox stresses that, despite the regulations not coming into force until 2014, local authorities should be making plans now. For starters, he says that with most councils buying energy a year in advance, decisions that effect 2014 will be made in the next 12 months. He adds that planning for making full use of dynamic half-hourly also takes time.

As to what they can do to be ready, Fox says it depends on the council in question.

‘The advice is to understand what is going on and to take steps to deal with that, which are suited to that particular council,’ says Fox. ‘Some may now benefit from the advanced control lighting systems, as they will be able to vary the light level during the night and reap the benefits of that.

‘Others may simply find that opting for dynamic half hourly rather than the other methods saves them money. Then you will have local authorities where systems that control the light depending on the traffic and conditions around those lights will be of benefit.’ With rumours that some of the methods of payment that do not encourage energy saving will attract further CRC penalties, some form of dynamic lighting such as the above is likely to be essential.

Putting that in place is, as Fox says, going to take time. Local authorities, then, better get clued up fast and get moving soon – no council in the current climate can afford a sudden 5% rise in streetlighting costs.