A partnership set up by Cheshire East Council and Ovo Energy is to be rolled out to a wider region and businesses.
Fairerpower was launched in March 2015 to cut people's bills and develop a local energy economy.
More than 7,500 customers have so far signed up to buy their gas and electricity via the scheme, which has helped save local residents more than £2m from their energy bills.
Cheshire East residents have saved an average of £224 on their annual fixed-tariff bills, in the past year, after switching.
However, the full potential of the Fairerpower scheme has not been realised due to contractual issues between the Council and OVO Energy.
Although Fairerpower has secured more than 7,500 customers to date this falls significantly short of the target of 6,000 customers per annum set out in the original business plan.
A report prepared for the Cabinet on Tuesday, 22nd August, said this is in a large part due to the fact that OVO have not been proactively marketing the offer or servicing key sub-markets, including businesses and registered social landlord (RSL) void properties.
The report states "An empty property without a tenant is referred to as a void. The market potential for voids is significant; across the Midlands and North West there are over 900,000 RSL homes. Should the Skills and Growth Company procure a supplier to deliver a voids solution to RSLs across the region it would provide a large market opportunity for generating bulk customer numbers.
"In 2015, a potential of 4500 void properties were secured for transfer to Fairerpower from three housing associations, on an annual basis for the next three years. Unfortunately, this was an area of the contract that OVO could not fulfil. Attempts by the Fairerpower commissioning team to sign up strategic partners have also been frustrated by the ongoing contractual difficulties. Little progress has been made against the objectives of developing a local energy economy or independent energy supply sources and it is clear that different contractual arrangements will need to be put in place if the wider objectives of the Fairerpower scheme are to be delivered going forward."
Following a decision by cabinet on Tuesday, 22nd August, Fairerpower is to be run by the council's arm's-length Skills and Growth Company under a new contract.
This will enable Fairerpower to be offered to the wider Midlands and North West region and, in the future, to businesses and social housing providers. It will also be able to develop new partnerships with several energy suppliers and other local authorities.
Councillor Don Stockton, Cheshire East Council cabinet member for regeneration, said: "Today's decision gives the 'best fit' to enable the council to sustainably deliver a cheaper fuel alternative to many more households, businesses and social housing providers – leaving more money in residents' own pockets and helping tackle fuel poverty across the whole region and not just in Cheshire.
"This was our promise when we started and Fairerpower tariffs have consistently been below the average of the 'big six' suppliers and its pre-payment tariffs among the lowest."
The Fairerpower brand may also now be expanded to include non-energy products or services.
Cllr Stockton added: "The Skills and Growth Company has the experience, skills, drive and determination to develop and expand the scheme for the benefit of the people of the wider region."
In order to transfer the Fairerpower contract to The Skills & Growth Company, Cabinet authorised the Executive Director of Place to approve a loan (on commercial terms from the CERF reserve) to fund setup costs including additional procurement, contractual and marketing expenditure, in relation to new suppliers, new partners, and marketing to new customers. The repayment of the loan is to be covered from revenues made from extending the brand to new areas.
