Electricity prices could be going up again

Wednesday 11 March 2020

The Guernsey Competition and Regulatory Authority wants to allow Guernsey Electricity to increase its unit charges by 4.8% over three years.

The "Statutory Notice" of the "proposed decision" is the first of two statutory stages in a process started after GEL submitted a request to the Competition Authority.

The business wanted to recover "uncontrollable costs related to importation and generation of electricity, which are primarily related to the price of oil and exchange rate movements over the period April 2019 to March 2020". 

The Competition Authority said it had looked at this, and the case for a tariff increase, and agreed an amount of £7.6m was recoverable, which equates to an increase of 4.8% in unit charges over the next three years.

The Law gives CICRA the power to regulate the prices GEL charges for its services in a way and for a time it deems appropriate, provided GEL has a dominant position in the relevant market. Following a careful assessment of the claim Guernsey Electricity put in, the Competition Authority said it was of the view the amount required by GEL meant it was acceptable to make an exception given the costs were uncontrollable. 

CICRA said it had also examined the extent of those costs and said an amount of £7.6m was reasonable. 

For these reasons it has agreed to the request for an increase in tariff prices. The Competition Authority said a more in-depth review of energy prices will be assisted by a policy position by the States, and is working with them toward that. 

Pictured top: The power station on the Bridge.