Guernsey Gas MD calls electricity tariff 'economic madness'

GUERNSEY Electricity's tariffs give it an unfair advantage in the energy market and will ultimately lead to higher electricity bills, according to Guernsey Gas managing director Paul Garlick.

The Office of Utility Regulation is now carrying out a high-level review of tariffs.

Guernsey Electricity's Superheat tariff customers are buying electricity at 6.92p per unit, but it costs the company, on average, 7.92p per unit to generate or import, according to its 2010/11 annual report and accounts.

'This temporary situation might seem attractive to the 1,000 or so Superheat customers, but it is economic madness for Guernsey Electricity. Its non-heating customers, and/or the taxpayer, are going to have to pay,' Mr Garlick said.

The Office of Utility Regulation stated in its 2010 price review that Guernsey Electricity would spend £11.2m. in 2011/12.

'When one considers these factors, it does indicate that electricity heating tariffs will need to rise significantly,' he said.

The electric company's operations director, Bob Beebe, said the Superheat tariff worked by supplying energy at off-peak times to spread the load through the day.

'Storage heating systems that use electricity only during off-peak periods help to spread the electricity loads throughout the day,' Mr Beebe said.

'This makes electricity more cost-effective to generate and GEL is able to pass on savings to customers in the form of affordable heating tariffs.

'In the same way, our Super Economy 12 tariff offers lower rates for domestic customers who use their electrical appliances during off-peak periods.'

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