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Efforts to reduce the standing charge for customers who generate their own power through solar panels or similar, will be challenged by Guernsey's sole electricity provider.
Guernsey Electricity has responded to last week's announcement by the Channel Islands Competition Regulatory Authority, where it said it wanted to cut the standing charge by just over half the current rate per unit.
The standby charges for people who generate their own power are a monthly tariff, and CICRA said it is "of the view that the standby charge applied by GEL is high compared to other jurisdictions to the extent comparators can be found and should, as an interim measure, be reduced until a full review has been undertaken on the appropriate level."
When the reduction was announced last week, CICRA admitted it might not be a permanent cut though, as a consultation is now open until the end of this month.
Guernsey Electricity has also now confirmed it will challenge the price drop.
The utility firm's boss has said CICRA's proposed charge is not suitable for Guernsey and needs to be recalculated.
Chief Executive of Guernsey Electricity, Alan Bates, said: "We are pleased that CICRA accepts the underlying rationale for having a standby charge. However, we do not agree with their proposed decision and will be responding to their consultation.
"The £3.07/kW/month charge, adjusted for GST, was calculated specifically for Jersey, not Guernsey, and applies principally to Solar PV, not to Combined Heat and Power (CHP) installations whose cost dynamics are completely different."
Pictured: Alan Bates, Chief Executive, Guernsey Electricity.
Mr Bates said a review of the proposed charges would be better placed.
"As the charge we understand was calculated for embedded generation in Jersey up to 50kW, we also believe that the charge should reasonably be applied to all embedded generation in Guernsey, not just to units with a capacity exceeding 25kW," he said.
"Above all, having a single rate, regardless of technology or size, risks misleading the market and sends the wrong economic signal to investors whose business case may need substantial revision when the final price is adopted. The need to consider technology specific charging was a fundamental point raised in the NERA Consulting report published in Jersey.
"Adjusting the standby charge in isolation is inconsistent and does not take account of the full picture. Guernsey Electricity remains of the view that a full review should take place of all tariffs and their structure to ensure the standby charge is reviewed in context, to ensure all tariffs are fair and reasonable to all electricity customers."
Guernsey Electricity also said it remains 'concerned that the current structure is being given as a barrier to market entry'.
The utility firm said there are CHP embedded generation units already in use in Guernsey under the existing arrangements, installed by the company quoted as a new market entrant.
"We will request CICRA to clarify this in terms of existing and new installations by this organisation."
Pictured top: Guernsey Electricity, Northside, Vale.
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