Electricity bills set to rise by £150 a year on average

And those with electric heating will have to pay almost double that.

Wholesale market volatility, high interest rates and high inflation are among the reasons behind the utility raising its charges by 10%.

The company has made the decision to increase charges due to the existing price fixes in its 15-year import contract coming to an end.

CEO Alan Bates said that a hedging arrangement that had been put in place in 2013 had been very valuable, especially over the past couple of years, saving the island more than £70m.

However, he said that, while this offered protection, it did not make the island immune to changes in the wholesale market.

‘As the hedging arrangement unwind some price increases will start to flow through to us, but luckily the market has reduced quite significantly so we haven’t seen the large increases that have occurred in the UK.

‘There will however be some impact on consumers’ bills from wholesale markets.’

Mr Bates said that, for individual customers, the rise would generally be between 9% and 11%, but that it would depend on consumption.

For the average domestic customer with electric heating, the overall increase will be approximately £63 per quarter, while it will be about £37 for customers without electric heating.

A tariff calculator is available on the company’s website to help customers understand the impact on their bills.

‘We don’t want to scare more vulnerable customers, we work closely with groups like Citizens Advice and Age Concern and we are always willing and happy to speak to customers worried about whether they will be able to afford their bill,’ Mr Bates said.

The tariff increases had been adjusted in different ways in order to reflect what it was costing the company, which included the import contract, as well as its investments and running costs, he added.

‘I don’t think we should ever go back into the world of passing on costs, because all we’ve done is take on an enormous amount of debt as a business to fund the investments.

‘Yesterday’s customers aren’t going to pay for that, so we need to make sure we reflect costs really fairly.’

Regarding energy usage, Mr Bates said that the island had become more efficient through a larger number of better-quality appliances, such as light bulbs, as well as more houses.

He said that a big focus for the company was working with customers through technology and innovation to see how it could control increases in future demand.

Within the island’s electricity strategy, which was published last year, it is predicted that demand would increase from about 380GW per hour presently to over 600GW per hour by 2050.

‘As decarbonisation of transport and heating takes place, you will see more consumption,’ Mr Bates said.

‘Consumption is how we recover cost, and maximum demand is what creates the cost and creates how much we need to spend on digging up roads, on equipment and in the power station.

‘Our maximum demand today is 94MW.

'If we don’t control how we use electricity we will end up with a maximum demand of 157MW by 2050.

‘If we do control it it might be 125MW, which would be a significant reduction in investment for us, and would reduce costs to the consumer.’