Is the price of electricity ever likely to go down?

As we all know it doesn't ever go down. They publish a price increase, because of the increased price of oil, or something else and state that it will decrease. When? I can't remember when it's gone down, ever. Maybe there might have been a slip of the 'pen' when they wrote that.

I may know the answer – we don't answer to individual's questions.

I may be an individual asking, but the answer would be for anyone/everyone concerned.

T. BUTCHER,

Aen Vrai Saonge,

Les Baissieres.

Editor's footnote: Alan Bates, chief executive at Guernsey Electricity, responds: 'Thank you for the opportunity to respond to your reader's letter. We realise that electricity tariffs and the affordability of electricity are very important matters for our customers. We have worked hard in recent years to keep tariffs as low as possible. The last increase in 2012, needed after the various issues with the electricity importation cables, only partly covered the significant increase in cost with having to generate most of the electricity on island. However, since this time, by increasing our operational efficiency and absorbing the extra costs, we have been able to keep our prices at the same level for the last three years. Despite the financial challenges the business has faced in this time we feel that freezing tariffs for over three years has been a significant benefit for our customers.

The price of electricity to customers is accounted for within three principal cost areas, firstly the wholesale energy market, the second being the cost to invest in infrastructure and finally the overheads of the business. We work hard to understand the costs in all these areas such that a balanced and stable tariff plan can be achieved which gives our customers certainty in terms of their electricity costs. If possible we will pass on savings we make in any of these areas, likewise we also use savings to offset cost increases which would otherwise cause tariffs to rise.

We understand that this cost certainty is very important to our customers. We believe they prefer a stable electricity tariff so they can plan their budgets effectively. Electricity supply involves very long term investment decisions which need a long term view of tariffs. It is not in our customers' interest for us to put prices up every time some costs increase or even to lower prices every time the price of the wholesale market moves, as this will inevitably require more acute price increases and decreases in the future to compensate. The recent reduction in the wholesale cost of oil, whilst significant, has not reduced to a point whereby on-island generation is cheaper than importing electricity for the majority of the year. We therefore, wherever possible, continue to import the majority of our electricity as this provides the most affordable supply for the island.

We plan for the long term and therefore a long-term tariff approach and stability of prices is the best way to manage tariffs for everyone.

I would like the reader to be assured that Guernsey Electricity takes the management of costs within the business very seriously and aims to provide secure and affordable electricity to its customers.'