This will take the cost of a unit of electricity on the island from 53.6p/kwh to 93.6p.
Managing director Alan Witney-Price said this would be imposed from 1 September until further notice.
The island’s sole power company is currently subject to a compulsory purchase order from Chief Pleas.
‘We have been quoted a quarter of a million pounds in costs for a judicial review and a quarter of a million for ongoing costs for the current price review, and none of that is recoverable,’ said Mr Witney-Price.
‘The legal levy has nothing to do with the production of power, which is lower than Alderney.
‘I continue to hope that Chief Pleas will take a breath and meet with us. I’ve asked for two meetings recently but they said they are happy for this to be dealt with through the courts.’
In a nine-page letter to customers, Mr Witney-Price said the 40p levy would be paid direct to his lawyers and be held against legal expenses. Any money unspent would be returned.
‘SEL is now forced into a situation where the company must mount a legal challenge against Chief Pleas’ move to seize its assets and remove its income stream,’ he said.
‘In doing so, Chief Pleas will have a significant impact on the future viability and value of the limited legal entity. Given that Chief Pleas has publicly stated that it expects to pay significantly less than the market value already agreed for the company, this matter is both serious and urgent. Legal challenges cannot be delayed.’
A Chief Pleas spokesman said this was a matter for the electricity price control commissioner.
The company and the price commissioner were in court at the end of last week for a directions hearing after SEL appealed against the current price controls.
Mr Witney-Price said the court had made clear that his company was currently in a position whereby it can charge ‘whatever it wishes for electricity’.
Sark resident Peter Cunneen said islanders were obviously worried at this constant talk of legal action.
‘We should have bought the company out a few years ago when we had the chance,’ he said.
‘Surely the legal action can’t be part of the bill?’
‘There is little we can do but hope that the price commissioner steps in and does something.’
Price control commissioner Shane Lynch said he had only learnt of the price change yesterday, and had also not been provided with any justification for a 3p increase in basic unit price.
He forecasted that the legal levy would generate additional revenues of about £45,000 per month for SEL.
‘To date the maximum price has included an allowance for legal costs associated with the normal course of business, like responding to a price control consultation,’ he said.
‘However, they have not included an allowance for legal appeals of price control decisions or for other legal challenges like the one referred to in SEL’s letter to consumers today. The burden of cost is typically decided by the judge and is on the unsuccessful party.’
Mr Lynch said he had been conducting a low-key investigation into SEL’s charges since the last price control ended on 31 March this year.
‘From today, I now intend to ramp up this investigation in light of this material increase in prices,’ he said.
‘Following completion, I will determine if this increased price is fair and reasonable. If I determine that it is not fair and reasonable, I can then make a new price control order.’
He added that he was required by law to consult at both stages of this process, and this could take a couple of months to complete.
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