Regulator role is more vital now than ever...

Commerce and Employment and Treasury and Resources propose that Guernsey Electricity and Guernsey Post should be made exempt from oversight by a regulator – are they mad?

In 2001 when the States decided to throw out political members from the running of these two entities and to give Electricity and Post freedom to run their own businesses, to set tariffs and particularly to hire and fire staff outside States Human Resources constraints, there was universal agreement that the people of Guernsey would need some knowledgeable body on its side to watch and control what was going on.

Guernsey Electricity, with States members on its Board had managed to lose £2.5m in inappropriate investment, had hoarded £17m-plus in cash for no particular reason (the regulator made GEL give it back to electricity customers over five years), had planned at some cost to spend £14m on a data centre only to discover that was the role of telecoms companies, and had made a complete mess of the Guernsey-Jersey cable ownership.

Its antiquated government-style accounts (deemed unsuitable for proper management by the regulator and States members) were heavily criticised and had to be dragged by the OUR into the 20th century – something its management continued to bleat about, yet shocked States members at the time.

States members in 2001 had no doubt regulation was needed.

They voted by a large majority, on two occasions, in favour.

At the same time, Guernsey Post, with States members on Board, was building its second new headquarters, soon to be considered too big at the time and only recently saved by Amazon. Give GPL its due, it worked and got on with the regulator over postal matters.

However, a little later, under 'shareholder supervision' and in a very short time, GPL set out to establish a bank, spending over £800,000. As soon as Guernsey caught up with what was going on GPL was advised that it could not set up a bank. What supervision? The regulator (OUR) rightly denied GPL the opportunity to recover the cash from postal users and the States (and the people of Guernsey) had to bear the cost. Heads did roll.

Besides being under the watchful eye of the regulator, both companies were required to establish consumer committees as a connection with their users. Guernsey Post established 'Postwatch', which has met regularly and reported publicly its activities. Guernsey Electricity, however, has failed in this requirement despite frequent reminders from OUR. The report in the Billet states that an organisation exists called 'Electricity User Council' – has anyone ever heard of this or has it ever reported publicly on its work? It does not get a mention on the GEL website, nor in the Annual Report.

Guernsey Post asserts that 'postage costs do not represent a significant proportion of expenditure for business and social customers. Social customers do not need the protection of regulation.' No mention of business customers. It also says that 'regulation has become unaffordable' but the amount is so small that it fails to warrant mention in the Annual Report.

Treasury and Resources and Commerce and Employment only consulted with the companies, the regulator (who objects fervently) Alderney, Sark, Postwatch and the Electricity User Council.

Is that enough? What about the People of Guernsey? What about Electricity and Post business users? Consultation as expressed in the Billet is a sham.

The Guernsey Competition and Regulatory Authority and The Channel Island Competition and Regulatory Authority currently costs Guernsey Post £30,000 on a turnover of £33m. and Guernsey Electricity £52,000 on a turnover of £55m. Tiny amounts bearing in mind the savings that have been afforded post and electricity users in the last 13 years.

The T&R sub-committee has no relevant expertise in either field among its members and intends to buy-in 'benchmarking' information. That is just not enough. T&R will be inclined to extract as much dividend from these two utilities at the cost of Electricity and Post customers.

The people of Guernsey need somebody on their side who understands the inner working of these two businesses. The abandonment of regulation of these two departments shows a complete lack of responsibility by the current States.

ROY BISSON,

Le Caprice,

Cobo Coast Road,

Castel,

GY5 7HE.