Price commissioner to act on Sark electricity
SARK ELECTRICITY has an unrealistic view of what its customers should pay, the island’s price control commissioner has said as he considers forcing it to cut its bill.
On Friday, SEL boss David Gordon-Brown issued a quarterly letter to customers informing them of a 29% increase per unit – rising to 85p from 66p, already the highest known price in the world.
The commissioner, Dr Anthony White, has suggested in a draft determination that if the company operated efficiently and economically, a price of 53p per unit might be sufficient to allow its investors to enjoy a reasonable profit.
‘SEL has an unrealistic view of the level of returns it is fair to expect customers to bear and it also assumes that all costs it incurs operating the business, whether they are reasonable or not, may be passed on to customers,’ he said.
This may be ‘neither fair nor reasonable’, he added.
He will now seek representations from SEL, residents and other interested parties by 22 October which may eventually lead to a legally enforceable price control order on SEL.
SEL blamed the increase ‘partly’ on a fall in consumption and ‘largely caused by over £10,000 per month of legal costs caused by having to deal with the price regulation legislation’.
The Control of Electricity Prices (Sark) Law, 2016, enables the Sark electricity price control commissioner to investigate the electricity price and determine whether the price is fair and reasonable.
Dr White said: ‘I am disappointed by the decision of the company to increase its charges, particularly in circumstances where my office received no warning that it intended to do so.
‘I also refute the suggestion that the legislation has been used to bankrupt the company, as claimed by SEL in its letter.
‘The law enables and requires me as holder of the office of the Sark electricity price control commissioner to investigate the electricity price and determine whether the price is, or is not, fair and reasonable. The process envisaged under the law is not complex.’
A spokesman for Chief Pleas, which has been in talks to buy the company since it threatened to shut down in November, said: ‘The price was unexpected, at the moment there is no more information about it. There was no notification of it coming, even though we have been in discussions.
‘As far as we were aware we are still negotiating an agreement with Sark Electricity which would enable us to possibly purchase the assets of Sark Electricity.’
Stocks Hotel manager and director Paul Armorgie said he sincerely hopes the people of Sark stick to Dr White’s draft and that the island was reaching a ‘put up or shut up time’ regarding SEL after last November’s ‘shenanigans’.
‘The rise has been a real shock to us all and it is crippling commercial wise. It is also creating fuel hardship around the island,’ he said.
‘A solution has to be found soon to what is a totally and utterly unfair and unreasonable increase. In what is a sad story and a sad day for Sark going forward, SEL has to become an island utility. Murmurings on the island have said that because it was so out of the blue some simply aren’t going to pay.
‘A number of islanders have begun looking for alternative solutions. At Stocks we have a back-up diesel generator and since last year we have been looking at photovoltaic panels, but we would rather not find another source. It would be better to find an island solution which allows all those who live on Sark access to properly priced electricity.
‘Normally you can’t tell someone else how to run their business, but when it affects your own it would have been nice to see Mr Gordon-Brown invest some of the profits of the last 10 years into renewable and alternative sources rather than continuing to use chugging diesel generators and lining the shareholders’ pockets.’