Guernsey Press

Regulator backs 6.8% power rise

A RISE in the cost of electricity has come a step closer with the CI Competition and Regulatory Authorities backing Guernsey Electricity’s request for a 6.8% increase.

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Alan Bates, chief executive of Guernsey Electricity. (Picture by Peter Frankland, 24183425)

In a draft decision on the proposed rise, Cicra said that this would be in place for three years from 1 July and would help GE recover ‘historic uncontrollable costs’ of £9.8m.

But this is not the regulator’s final decision, and it is now seeking responses to the draft, which must be submitted by 29 March.

GE signalled its desire to increase the cost of power earlier last month as it faced an unexpected bill from more on-island generation after the cable link failures since October.

'The combination of this reduced control and increased foreign exchange and fuel oil and other commodity costs is putting significant financial pressure on GEL,' Cicra said.

If it goes ahead, this will be the first price increase since October 2012, when there was a 9% hike. It covers increased costs since 2017.

The regulator said should any future review of tariffs show that the amount raised was materially excessive it could be recovered in future price controls.

It also announced its final decision following a review of GE’s standby-charge for commercial-scale power generation - a cut by more than 50%.

These costs relate to the importation and generation of electricity and are largely due to the price of oil and movements in the exchange rate.

It said will now be £3.07/kW/month. It was previously £6.8594.

This change would be ‘for parties who would otherwise have to pay the charge, subject to those parties agreeing to reimburse GEL should a subsequent regulatory decision (or a decision of comparable legal standing) set a different rate, and again for GEL to reimburse those parties should the rate be too high’.

The review followed a complaint by the International Energy Group that the charge ‘was an abuse of Guernsey Electricity’s dominant position in the market’.

. Comments on Cicra’s draft decision on electricity prices must be sent to the authority by 5pm on 29 March. – Guernsey Competition and Regulatory Authority, Suite 4, 1st Floor, La Plaiderie Chambers, La Plaiderie, St Peter Port, Guernsey, GY1 1WG. Email: info@cicra.gg

Comments should be clearly marked ‘Comments on E1392G Draft Decision – Cost Pass-through for Uncontrollable Costs of Guernsey Electricity Limited 2019’.