‘Guernsey Electricity needs more support from States’

But the president of the States’ Trading Supervisory Board, which represents the States as the shareholder of GE, said that the utility was having to raise charges with effect from yesterday because its tariffs had not been increased for a decade.

Peter Roffey conceded that the rises could have been brought in more gradually.

Age Concern’s David Inglis said that he had been contacted by a number of people asking about the charity’s winter fuel grant, even though applications would not be open until later in the year.

He said the majority of those who had been in touch used electricity to heat their homes.

‘I’m very disappointed that the government, which is the main shareholder of Guernsey Electricity, has approved a 9% increase just to deal with the infrastructure,’ he said.

‘As taxpayers we own Guernsey Electricity and we’re paying again for it.’

He said many did not realise that two further rises of 7% were set to be requested next year and the year after.

‘We’ve had a 5% increase in the cost of generation power and we can accept that, but it’s just going crazy.’

The rises were to fund GE’s infrastructure redesign and came against the background of the utility having £42m. of debt.

‘That’s why they can’t invest. I find it incredible,’ said Mr Inglis, a former States deputy.

‘They’re happy to pay £13m. to Sure to put in fibre to our homes, so why can’t the States give GE this money and not charge the community?

‘The user should not be paying for infrastructure. It’s a utility. Taxpayers have already paid for it.’

Deputy Roffey said that the States had determined that GE should operate on a commercial basis and so generate enough revenue through its charges to meet its long-term investment requirements, rather than receiving money from the States’ general revenue or capital reserve.

This was the basis on which the recent application for a tariff increase was considered by STSB, also taking into account other current States policies and directions.

Underlying tariffs had not been altered for a decade so its revenues had fallen short of what would be needed to both provide the service and invest.

‘It is now forced to play catch-up. The current correction in tariffs really should have been done far earlier and possibly in a more gradual manner,’ Deputy Roffey admitted.

‘We understand the timing of this is not ideal, but to defer any rises will simply compound the problem and require even bigger increases in future.’

Deputy Roffey said that if Policy & Resources chose to inject cash from the capital reserve that would still not reverse the decision that was made in accordance with the laws that apply in setting GE’s tariffs.

It would lead to taxpayers today funding more of the infrastructure costs to benefit customers in the future.

The States’ investment in Sure’s fibre network was for a one-off transformational programme which was not comparable with the sort of routine infrastructure work in which GE needs to invest, he said.

‘If the taxpayer started subsidising such bread-and-butter investment to avoid any tariff increases then such subsidies would become permanent and would need to grow over time.’

Deputy Roffey did not believe Aurigny should be subsidised routinely, but the pandemic had created a situation where the owners of all airlines need to inject significant funds.

‘In normal times I am determined that Aurigny should stand on its own two feet.’