The GCRA issued a direction to GEL in late 2020 for the company to publish full details of new prices, special offers or discounts to published prices provided under special agreements with some of its larger customers.
GEL took the regulator to the Royal Court over the matter, arguing that it should be allowed to keep these details private and publishing them would make public commercially-sensitive information.
The company said there was often more to these agreements than simply setting a price. Its appeal was allowed and the direction was quashed by the Bailiff, Richard McMahon.
But in a recent publication, the GCRA said that while allowing the appeal, the court had nonetheless confirmed that the regulator had the legal authority to regulate these agreements, even though it did not support the use of the licence condition that the GCRA had relied upon for that specific direction. That left a situation where there were no pricing principles that GEL must comply with when entering into these special arrangements and no transparency in relation to them.
‘The authority is therefore minded to introduce a new licence condition in GEL’s licence to meet its regulatory obligations in exercise of its jurisdiction confirmed by the Royal Court,’ said the GCRA.
‘The purpose of the licence condition is to achieve the benefits of transparency and an obligation on GEL to satisfy certain due diligence safeguards regarding its pricing in special agreements prior to their coming into effect.’
Consultation over the proposed new condition has taken place and GEL has submitted its response to this.
‘Our commercial supply agreements (CSAs) are lawful and the Royal Court has confirmed that Guernsey Electricity has not breached its licence conditions by not publishing those prices,’ said GEL chief executive officer Alan Bates.
‘Our CSAs provide significant and wide-ranging benefits to all Guernsey Electricity customers, by ensuring that larger customers, who place a heavy demand on the network, pay a fair share for their supply of electricity.’
He said that it had shared all of these agreements with the regulator and GEL continued to work with it for the benefit of all customers.
GCRA chief executive Michael Byrne said that it had tested the ability to use a licence condition to investigate some of GEL’s pricing agreements. ‘The court decided it was not an appropriate route, so the authority is using an alternative condition towards the same aim.
‘The court said the authority clearly has jurisdiction over these agreements and transparency is an important means of holding such businesses accountable.’