Bristol City Council has switched its energy contract away from its own standalone energy company to British Gas.
The council said it was forced to award the contract to the Big Six supplier due to procurement rules, the council said.
The move comes as it was revealed that the council has ploughed an extra £6.7m into the company, Bristol Energy, since November.
Craig Cheney, cabinet member for finance, said: “We are fully behind Bristol Energy and many people have already switched, which has saved customers over £10m.
“However, we must follow the procurement rules when awarding public contracts using public money. We have a number of different energy supply contracts which are awarded based on a fair and open tender process.
“Unfortunately, Bristol Energy did not win a contract this time.”
The decision was attacked by Bristol’s Green Party, with lead councillor Eleanor Combley saying she was “deeply saddened”.
She said: “Just a few months ago full council voted through an updated policy on social value, committing to promote our local economy and environmental sustainability in the council’s procurement rules.
“Value for money isn’t just about choosing what is cheapest, it’s also about investing in what is right for our local communities and our city.”
She said that the council was also obliged to consider the social value of its contracts, and that Bristol Energy would have been a better choice because its profits were returned to the city’s communities.
Meanwhile, it has emerged that the council has ploughed the extra money into the company after it reported an £8.4m loss last year.
It has also pushed back its estimated profit date from 2019 to 2021.
Cheney said: “We remain fully committed to Bristol Energy and the principles behind why it was set up.
“We are helping tackle fuel poverty, we are creating hundreds of local jobs, we are boosting Bristol’s economy and, ultimately, the investment in the company will come back to the council with interest enabling us to deliver more social good for the city and citizens of Bristol.”
Peter Haigh, managing director of Bristol Energy, said that the latest council investment was less than originally planned because it had outperformed its target for customer numbers.
