‘Absolutely essential’ 9% rise in electricity cost is approved
A NINE per cent hike in the cost of electricity locally has been agreed by the States’ Trading Supervisory Board.
The move, which is likely to cost most islanders between £8 and £18 per month, will support the company’s shift towards renewable energy. It is the first price rise in electricity tariffs since 2012.
STSB president Peter Roffey said although the increase would not go down well with islanders, it was absolutely essential to fund the investment in infrastructure which was needed.
‘It should have been done ages ago but we didn’t have a system of regulation in place to allow it to happen,’ he said.
The tariff increase is not impacted by geopolitical issues such as the war in Ukraine, which has led other suppliers to raise costs.
It will be split between the charge per unit and the fixed standing charge per customer, which means the actual increase will depend on how much electricity each customer uses.
Currently around 96% of the company’s revenues come from the per unit charge, even though the cost of generating or importing electricity only makes up half of the total cost of supply.
The fixed costs of maintaining the electricity grid making up the rest.
To address this, the revised tariffs will increase the proportion raised through the standing charge from 4% to 7%.
‘There has been no normal adjustment of tariff since 2012, so the real cost after inflation is lower,’ said Deputy Roffey.
He said the company was‘deeply in debt’ and needed to spend at least £10m. a year to look after the resilience of the island’s network.
‘It is about making sure the lights don’t go out. This is the first step to the long-term goals that will be detailed by the States this year in the energy strategy which will be a move towards electrification. We need major investment in our grid and other infrastructure.’
He said the island had reached a point when islanders could be let down unless infrastructure is improved.
‘Guernsey isn’t alone in this – Jersey will be putting up its rates more than here.’
In its decision notice, STSB said current investment levels in electricity infrastructure fell well below the level needed to deliver the energy transition.
‘While highly conscious of the impact of increased charges on consumers at any time, but in particular during the current economic situation, the board has nevertheless determined that the most important factor to be addressed in determining that the most important factor to be addressed in determining the application is the pressing need to start correcting levels of under-investment in the electricity network.’
The cost increase will come into effect on 1 July.
