Secret documents seen by this website show residents who move into the planned Felnex complex could be locked into incinerator-powered heating contracts that could cost about 21 per cent more than the open market.

The same confidential document, prepared by Sutton Council officers, also advises the authority "remain firm" with Schroders, the development company that will build the 725-home site, over its tariffs, expected to be about 14.16p per Kilowatt hour.

Sainsbury's charges around 11.7p for combining gas and electricity.

Those moving into Felnex, a 7.7 hectare housing development in Hackbridge, will not be allowed to change their energy provider.

Councillor Jayne McCoy and Sutton chief executive Niall Bolger have both sought to emphasis the charges listed in the confidential document were "model" tariffs used to create the business plan and no that firm prices had been agreed.


The project is being run by Opportunity Sutton.

Public documents published a month later during the council's March 3, Housing, Economy and Business Committee, confirm Sutton's Decentralised Energy Network was viable with a projected cumulative cash return over 25 years of £1.5m.

The same figure is the one quoted in the confidential papers, if the tariff of 14.16p is used.

Coun McCoy, chairman of the Housing, Economy and Business Committee, said that if the scheme could not be made profitable the council could scrap it, although the intention was to roll it out to other developments including St Helier Hospital, Durand Close as well as Carshalton College and Sutton's council offices.

A council spokesman added: "Residents should be assured that we will only enter a deal if it benefits them by providing green energy at advantageous rate. Then, any money that is made by the Council will be reinvested in services and initiatives such as helping to reduce fuel poverty.

"The confidential information is part of a model to provide a framework for negotiations and no final decision on energy tariffs and costs has been agreed. The leaking of this commercially sensitive document will not help in our efforts to get the best deal for residents."

The modelled figures in the secret document would give the council an estimated profit of £60,000 a year leaving little scope of offering lower prices if it wished to remain a profitable concern.

The confidential document also suggests Felnex residents would face high fixed costs, accounting for roughly 40 per cent of the estimated charges. This means that even the during the warmest months a prudent home owner who kept the thermostat switched off would still face a £20.77 monthly bill.

Coun McCoy said its modelled prices were based on industry averages.

The papers say: "These tariffs are currently set to offer a 0 per cent saving to end users compared with alternative costs."

It adds: "The approach moving forward must therefore be to remain firm with Schroders (the company seeking to build the Felnex housing project) and their development partner on the tariffs set out in this briefing paper, or find savings to offset any reductions, ie reduced financing charges, and for the project team to immediately identify to the project board if they become aware that the tariffs proposed in this paper, or tariffs very close to these are becoming unachievable."

Other revenues streams Sutton Council's company expects to make from the project include connection charges levied on Schroders.

For every home connected, Schroders would be asked to pay £1,400. 

Overall providing energy to the Felnex site from the Beddington waste site will net the council £1,540,481, excluding depreciation, over the 25 years to 2041.

Coun McCoy said: "14.16p is the top rate we would be looking to charge and even at that we would look to see if we could get it lower, but we don't know what the final price will cost.

"It is a model, based on what we think the assumptions are."

Other pages in the leaked document also raise questions of whether the energy recovery aspect of the incinerator is even needed.

Campaigners against the scheme have argued that part of the very special circumstances behind granting permission for the South London Incinerator was that there was demonstrated intent to use the heat generated from burning waste to heat near-by homes.

The report says using energy pumps harnessing gas created by the existing landfill site in Beddington Lane could cover Felnex in all but the most "extreme" circumstances. 

It states: "Except for extreme weather conditions the majority of the heat required by Felnex could be delivered from the landfill gas engines until the energy recovery facility is on-line and the Sutton Decentralised Energy Network elects to switch to this heat source."

This gas energy would of course only be available while the site was still used as landfill.

Coun McCoy said: "Felnex is just the starting point. There is so much potential to connect across the borough and into other boroughs.

"That is the potential."