Tariff restructure a priority as GE reports loss of £7.6m.
GUERNSEY Electricity has reported a multi-million pound loss and has made restructuring its tariff structure a priority for 2020.
The publicly-owned utility reported an operating loss of £7.8m. for the financial year 2018-2019, before pension settlement gains, in a 12-month period that saw the GJ1 electricity link to France via Jersey fail.
The loss includes £3.4m. of non-cash impairments of assets associated with the importation of electricity.
There has also been a 2.2% decrease in electricity usage locally which reduced sales by £1.6m., attributed to improvements in energy efficiency in appliances and in buildings, as well as milder weather.
Over the period £11.4m. of cash was re-invested back into business activities, which represents an increase of £3m. from the previous year.
The company continues to benefit from a strong balance sheet with a fixed asset base of £133.9m.
Alan Bates, chief executive officer of Guernsey Electricity, said the past year had been challenging in many respects but that the company had performed credibly.
‘The costs of initially repairing and then replacing GJ1 and utilising the power station for 12 months, along with the impact of Brexit on our foreign exchange dealings, has affected us significantly.
‘We have however, overall, achieved a commendable underlying result which has seen bold decisions taken for the long term benefit of the company and Guernsey.’
Mr Bates added: ‘Despite the impact of the recent cable issues, our underlying financial performance continues to fall significantly below the level required to fund necessary investments in the island’s electricity infrastructure and this remains an important issue as we plan for the future.
‘In addition to recovering today’s costs, we anticipate an increase in renewable self-generation and storage as technology develops and we need to facilitate this in a fair way for all islanders.
‘While customers use less electricity from the grid, a large proportion of our costs to maintain the grid as back-up supply will remain fixed and unaffected by the reduced amount of electricity used.
‘Our current tariff structures, which have been in place since 1993, are not fit for this future and therefore, need to be comprehensively restructured to allow for infrastructure investments and to meet the changing energy needs and behaviours of our customers. This will be a priority for us in 2020.’
Other priorities include securing a direct electricity link to France from Guernsey to provide the island with a reliable, sustainable and affordable low-carbon electricity supply.
Due to reliability problems with the GJ1 sub-sea cable over the past 12 months, the company has only been able to import 55% of the island’s electricity – impacting on Guernsey Electricity’s environmental targets. Supporting community-scale renewable generation and electric transport to support a low carbon future are other key objectives for the company.
‘As a business we need to be adaptable and agile as the way we use and generate electricity evolves. Further engagement and policy development needs to look to the energy system in a decade’s time and how as an island we can create a low carbon system that customers see as fair to all and which delivers excellent service, choice and value for money to homes and businesses,’ added Mr Bates.