Guernsey Electricity in 14% price rise warning

The utility last raised prices in July, when bills went up by 9% to help fund existing infrastructure.

At that time it was hoped this year’s increase would be less than 9%, but the situation has deteriorated.

‘Due to the continued volatility in the global energy market, the rising cost of importing and generating electricity, and the requirement for urgent investment in the island’s infrastructure, an increase in total electricity income of 14.25% will be required in 2023,’ the utility stated in a newly-launched public consultation on tariffs.

‘This will impact the tariffs that consumers, both domestic and commercial, will pay.’

The proposed 14.25% increase in Guernsey is an average income increase, so will vary between customers.

An average domestic customer without electric heating will pay an extra £47 to £49 per quarter. Those with electric heating will see rises between £76 and £86 per quarter.

The utility stated that any rise would be for investment and would not be for profit.

‘Our forecasts of the increased cost of electricity importation and on-island generation, alongside the continued requirement to maintain and upgrade the electricity network and infrastructure to prepare for the move away from hydrocarbons, means that additional increases to the total electricity income will also be required in subsequent years,’ the consultation states.

‘This will likely result in further tariff rises over the coming years.’

Investment in the network will not rely on tariff rises alone.

Guernsey Electricity plans to borrow some of the investment required and take on further debt. This helps spread the investment needed over a long period of time and reduce the impact on customer bills.

‘We think it is best to use a combination of tariffs and debt because funding it all through tariffs would mean even higher price increases for customers, and funding it all through debt would affect the financial stability of Guernsey Electricity.’

As well as getting feedback on tariff rises, the consultation will also inform the company on funding investment in the island’s electricity infrastructure.

Chief financial officer Karl Brouard said local customers had been relatively insulated from the types of rises seen in the UK as a result of the utility’s forward price setting strategy.

‘[But] we are not immune from the wider geopolitical impact,’ he said.

‘Coupled with inflation hitting the highest rate for 30 years, this means we are facing increases in the cost of imported energy together with a rise in the cost of on-island generation at the power station.’

Guernsey Electricity needs to upgrade its network and infrastructure over the coming years and maintain old power station equipment to ensure it can continue to act as a back-up. Mr Brouard said the consultation formed an important part of explaining the challenges of delivering the energy transition for the island.

‘We realise that this comes at a time when the cost of living for everyone is increasing, but we cannot let these changes delay the planned investment in the network and the need to maintain the security of electricity supply to the island,’ he said.

‘We must start to boost our investment and create a network that can cope with the rising electricity demand we are seeing, support an increase in local renewables and provide the infrastructure to achieve net zero carbon targets set by the States.’

The consultation results will be used to inform the final tariff application made to the States Trading Supervisory Board, which approves electricity tariffs.

As part of the process, the company is to run a number of stakeholder face-to-face and telephone interviews and the public survey will be accessible through

www.electricity.gg/electricity/tariffs/2023-tariff-consultation/.

Paper copies are available at Electricity House.

The consultation closes on Tuesday 7th March.