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No cap on electricity prices for Sark residents this winter

No cap on electricity prices for Sark residents this winter

Thursday 28 October 2021

No cap on electricity prices for Sark residents this winter


Another power struggle is brewing in Sark, as there will be no price cap on the amount the island's only electricity company is able to charge its customers this winter.

The island’s electricity price control commissioner, Dr Anthony White, has published the maximum unit electricity price for November at 60p/kWh. This follows continual rises this year, from 50p to 55p in April, and up to 58p in August.

The PCO was imposed in 2019 at a time when Sark residents were facing unit prices of 85p. A 19p hike was introduced in 2019 to cover losses generated by Sark Electricity Limited, leading to electricity prices nearly four times higher than of those in Guernsey.

Despite the price per unit still being high, the PCO has protected residents of Sark from unit prices rising to those levels again. But that could soon be about to change.

Sark electricity

Pictured: SEL threatened to cease trading earlier this year and cut power from 19 homes in the island during a legal dispute with a landowner.

“The Price Control Order commenced operation in December 2019 and will expire on 19 December 2021,” Dr White confirmed.

“Two years is the maximum time allowed under the 2016 Law. I am keen to understand the basis on which SEL will set prices in the absence of a PCO."

It is not yet known what price this will lead to customers being charged more in the future. Sark Electricity has previously emphasised its poor economies of scale with just 300 customers translating to high running costs and "a very high unit price for electricity."

“I hope there will not be a need to set another PCO," said Dr White. "However, should this become necessary, residents should be aware that the process will take a few months.”

This essentially means, come mid-December, as people start to use more electricity to heat their homes, the cap on electricity prices in Sark will be removed.

It comes as both the commissioner and Sark’s government, Chief Pleas, lament their inability to contact the Managing Director of SEL, Alan Witney-Price.

“We have not heard what the price structure may be for next year, nor has the Price Control Commissioner despite attempts to obtain this and other critical information concerning the fair pricing of electricity for residents,” said Chief Pleas.

Sark_Chief_Pleas.png

Pictured: Chief Pleas continues to negotiate a business valuation of SEL in preparation for its purchase.

The most recent rise in the price cap itself followed the commissioner not being provided with consumption or revenue figures for September from SEL, information he needs to calculate what Sark residents are using and what constitutes a ‘fair price’ for customers and the business itself. 

“As a consequence, I have needed to make assumptions concerning the number of units sold and revenues raised by the minimum monthly charge,” continued Dr White.

To safeguard the island’s future power supply, Chief Pleas voted to buy the utility earlier this year. This still remains its intention, however there has been little progress in negotiating this with the company's owners.

“The Policy & Finance Committee remain committed to the resolution of Chief Pleas on the 21st June 2021, and intend to buy SEL or it's assets, preferably by negotiation.”

When asked by Express what Sark’s government will do to protect the residents of Sark from uncapped and potentially increasing tariffs, it could not offer guarantees.

“Chief Pleas will continue to work with SEL to ensure residents are charged a fair price for electricity. It is for Sark Electricity Limited to set prices and the Price Control Commissioner to investigate, if necessary,” said Chief Pleas.

Express contacted SEL and Mr Witney-Price for comment but were told he is currently on holiday and unlikely to reply.

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Posted by Robert Williams on
Surely a connection to the Guernsey grid makes sense.
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