Power struggle over future of electricity

Tuesday 07 September 2021

The Little Green Energy Company has challenged Guernsey Electricity's plans for a new energy framework

Policy & Resources, Economic Development and the States Trading Supervisory Board are jointly proposing interim tariff regulation arrangements for GEL while the States-owned utility comes up with a new pricing structure.

This is ahead of this week's States debate, where Deputies will be asked to give the STSB- a shareholder of GEL - regulatory oversight until at least 2023. 

This would be in replacement of GEL’s current external regulation by Guernsey Competition and Regulatory Authority – an independent body with an independent board.

There has been no comprehensive review of GEL’s tariffs since 2012. 

GEL proposed to create an energy market of “equity and fairness,” however, LGEC have expressed concern of the “unfair playing field” that it says will transpire if GEL is allowed to be regulated by its own shareholders.

The company said: Tariffs and prices will be adjusted to make it financially unviable to have independent, renewable electricity generation on the island, not only from our company but others wishing to enter the market."

GEL states that the current price signals do not allow the most informed investment decisions to be made by customers, businesses and competitors. 

“The cost of the network and security of supply should be spread fairly across all customers, so the tariff proposals ensure that if Islanders choose to install private renewable systems whilst still being connected to the network, others do not carry the financial burden," said Guernsey Electricity CEO Alan Bates. 

“If these changes are not passed, our remaining customer base that do not have their own private renewables will subsidise those customers who [are] able to invest in this technology.”

GEL have proposed to change tariffs to provide transparency for customers of the true costs of electricity and of providing the Island’s valuable network and security of supply.

This will allow customers a better vision of the price of energy from different sources, including renewables. 

LGEC has argued that this would cause less transparency for islanders and more opportunity for hidden costs, as customers could not be certain that additional revenue would be spent on infrastructure without independent regulation.

The LGEC statement continued: “This would bring the unit cost of electricity so low that it is not economically viable to install renewable systems but could also increase fuel poverty.”

This week's States meeting will begin on Wednesday 8 September.