Cicra ‘expects electricity price increase application in 2020’
A REQUEST for an increase in the price of electricity is anticipated by the Channel Islands Competition and Regulatory Authority as one of the items it will have to deal with during 2020.
Cicra has published its work regulatory programme reports for the year ahead, three of which – electricity, telecommunications and competition – will affect Guernsey.
Among its other anticipated jobs is help pave the way for the introduction of the 5G mobile network; with developing new 5G licence conditions; publishing an invitation to tender process; and awarding 5G spectrum and licences among its programmed work.
Although Cicra remains the regulator of Guernsey Electricity Ltd, the States has already voted for the role to be passed to the Committee for Economic Development.
But the law activating the change has not yet been passed, and in the interim Cicra continues to act as electricity regulator.
In its report on the electricity work programme the regulator said that it had attempted to curtail its activity, but a number of smaller issues arose and it acted on those.
A price rise application is expected from GEL to meet the costs of the recently-completed Guernsey-Jersey cable, which, although unknown at the moment, are expected to represent a significant outlay. ‘The expectation is that GEL will request a further price increase to cover those costs,’ said the report.
Generally, Cicra said: ‘It will rely on the forthcoming energy policy informing its priorities and anticipates applications for tariff increases from GEL.’
Also set to be included in the work stream is a review of GEL’s standby charge (a monthly charge levied on customers with embedded generation capacity based on their installed capacity).
GEL is also intending to rebalance its tariffs, and, in the wake of this, Cicra will, subject to the availability of the forthcoming energy policy, ‘consider whether GEL’s tariff structure is consistent with relevant legislation, licence conditions, general economic regulatory principles and, in particular, reflects the ambitions of Guernsey’s energy policy.’
The energy policy could lead to GEL beginning to investigate a direct cable link to France, and this investment would probably be the largest undertaken by GEL since the late 1990s, said the report.
‘As such, the cost implications for consumers required to meet those costs through their tariffs is likely to be significant,’ it said, and has included this in its work programme too.
In the field of telecoms, Cicra intends to carry out a review of leased telephone lines and wholesale broadband prices over the coming year.
In addition to supporting the island’s path to next generation connectivity, it aims to establish a fairer playing field for competitors.
Another item listed in its proposed work for the year is giving consideration on whether to intervene for the protection of vulnerable consumers.
It also intends to monitor standards and commitments in comparison with other jurisdictions.
With regard to competition generally, Cicra will be gathering information and giving advice to government as part of its competition reviews.
‘Cicra may carry out a review of any feature, or combination of features, of a market which prevents, restricts, or distorts competition (eg, in the form of higher prices, lower quality, or less choice of goods or services, or less innovation in relation to goods or services in Channel Islands markets),’ said its competition work programme report.
‘Cicra may then make recommendations to the minister/committee for change or a policy on market structure or legal framework.
‘During 2020, Cicra will make or receive recommendations through government for market reviews as appropriate.’
