Sark Electricity – 'sorry for all the commotion last week’
Chief Pleas will underwrite £115,000 being paid towards Sark Electricity's legal fees after the dispute over power costs.
Company owner David Gordon-Brown revealed the figure in a letter he has written to all of its customers in the wake of a row that could have seen the island lose its electricity supply.
He also said that before a court battle was avoided, he had accepted an offer from Chief Pleas of £20,000 a month for three months as a subsidy to keep the power on.
Mr Gordon-Brown opened his letter by apologising ‘for all the commotion last week’.
‘Hopefully this will never happen again and common sense will prevail in future.’
The dispute arose after Sark’s electricity commissioner reduced the price per unit from 66p to 52p.
Mr Gordon Brown said this had led to the company losing £20,000 a month and warned that he would have no choice but to cut the power at the end of November.
But an agreement was reached at the eleventh hour to keep the power on.
However, wrote Mr Gordon Brown in his letter, said: ‘in all the media hype, the truth of what actually happened has been lost.’
He said that a member of the island’s Policy and Finance Committee told him on Thursday afternoon that Chief Pleas would give the company a monthly grant of £20,000 for three months as a subsidy to enable the company to keep selling electricity while the government carried out a valuation of the firm with a view to buying it.
‘As this finally provided a way to keep the power on, I agreed,’ said Mr Gordon-Brown.
But later that evening he learned that the commissioner’s lawyer had persuaded him not to continue into court to defend the price control order since it was unlikely to be successful and would have increased costs.
The lawyer approached Sark Electricity’s counsel and a settlement was reached: ‘As a result, the commissioner has agreed that the court should quash his faulty ‘determination’ that our prices are not fair and quash the resulting Price Control Order,’ wrote Mr Gordon-Brown.
‘So our price has now returned to 66p. The lawyers continued their negotiations until quite late, eventually agreeing that the commissioner would pay £115,000 towards our legal costs.’
He said that this did not cover all the costs, ‘but it certainly helps’.
But he added that ‘unfortunately’ the commissioner’s lawyer’s costs were underwritten by Chief Pleas ‘so we all end up paying for them’.
Now the matter was over, he hoped that this was the start of a new era of ‘common sense and cooperation’.
The electricity commissioner has agreed to calculate prices from actual costs in Sark in future, not ‘hypothetical’ costs based on those of larger companies in the UK, he said.
Mr Gordon-Brown said he hoped that the new Chief Pleas would change its direction: ‘If we had thrown all the money that “regulation” has cost Chief Pleas into a pot together with all the money it has cost the company, we would be close to buying Sark Shipping their new boat,’ he said.
He said that the company would cooperate with Chief Pleas to value it and let them buy it if they want: ‘We will work with them to make the transfer as smooth and sensible as possible,’ he wrote.
Once the lawyer’s bills were paid, Mr Gordon-Brown hoped the company should be in a position to start reducing the price by next summer.
But he also hoped that Chief Pleas would be able to buy Sark Electricity at the end of February: ‘They will not have to worry about paying off the debts or recovering reserves as they will bring their own financing with them.
‘So they should be able to reduce the price even more quickly.’
- Mr Gordon-Brown’s letter ends with the news that the island’s Christmas lights will be switched on Friday 14 December.