Guernsey electricity price to rise on 1 October 2012 to pay for higher on-island generation costs

September 15th, 2012 by Channel Islands Competition and Regulatory Authorities

A connecting rod inside one of Guernsey Electricity's Sulzer two-stroke marine diesel power plants (click image to expand - ©RLLord)

CICRA (the Channel Islands Competition and Regulatory Authorities) has agreed to Guernsey Electricity’s application for a 9% tariff rise from 1 October 2012.

Andrew Riseley, CICRA Chief Executive, said that the cable failures had been the main catalyst for the necessary rise.

“Although a price rise of this size is not ideal there are extenuating circumstances which mean that GEL is forced to generate costly on-island electricity as a consequence of the failure of the cables from Jersey to Guernsey and from France to Jersey, and some issues with sub-stations. Together, these have necessitated the increase,” he said.

“We are satisfied that GEL has demonstrated that the costs of having to generate more electricity on the island are significantly higher than the cost of the electricity supply that GEL would normally get through the cable links.”

“In the interests of light-touch regulation, and the regulator’s adoption of a model of regulation where the utilities will be given more autonomy to make decisions with CICRA retrospectively considering those decisions, we have agreed to allow this increase.”

Mr Riseley stressed that the regulator had made it clear to Guernsey Electricity that the price rise should remain in place no longer than absolutely necessary to recover costs arising from this exceptional series of events.

The tub, Maersk Puncher, on station near the cable repair site between Guernsey and Jersey in the distance (click image to expand - ©RLLord)

It is anticipated the Jersey to Guernsey cable will be repaired before November while the French cable is unlikely to be replaced before 2015.

Mr Riseley said CICRA had stipulated that the price rise be reversed once a second cable link to France is re-established, and said that CICRA would hold discussions with Guernsey Electricity at that time to ensure that the interests of Guernsey electricity consumers were protected.

 

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