The States’ Trading Supervisory Board agreed the increase after Guernsey Electricity applied for a 9.5% rise, in part to meet the rising costs of import and generation after long-term importation deals expired.
At the same time, the board has told the company it expects to see efficiency savings of about £1.8m. by the end of 2027, which should see a reduction in the need for tariff increases in future.
‘Islanders have been relatively fortunate to have been largely shielded from the massive hikes in energy bills we saw happening elsewhere in recent years,’ said STSB president Peter Roffey.
‘That is thanks to the fixed price agreements that were in place for the electricity that we import. Those are ending so we are having to adjust to wholesale market prices.’
The 8% rise follows a 10% increase at the same time last year and will be split for customers across the charge per unit and the fixed standing charge.
It was found in a past benchmarking exercise in 2022 that electricity costs in the island were among the lowest in the British Isles in 2022. Since then the cost of importing and generating power has risen substantially. And the company was still recovering its funding plans after the regulator had kept tariffs ‘artificially low’ for a decade, STSB said.
‘This starved Guernsey Electricity of the funds to adequately invest in the network,’ said Deputy Roffey.
‘Unfortunately customers are now having to pay the price of that, and we do not want to repeat that mistake and burden future consumers.
‘The STSB has therefore acted responsibly in approving an increase, although not to the level that Guernsey Electricity had requested.’
GE spent more than £30m. maintaining and upgrading the island’s network between 2021 and 2024, much of which was financed through borrowing.
It intends to increase this investment to about £12m. this year and £13m. in 2026.
GE will also be contributing about £10m. towards the replacement of the cable between France and Jersey between now and 2029.
STSB said that it was not commercially sustainable for GE to continue borrowing to maintain its existing infrastructure.
‘It should be moving to a position where further borrowing is only contemplated for capital investment to support the growth of the business, in accordance with the Electricity Strategy.’
It also confirmed that GE would be capping the income it received through quarterly standing charges at 15% of its annual income, pending a full review.
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