Select a region
The pressure has been turned up on Jersey Gas - as the company enters crunch talks with government over an "insensitive" price hike today, Reform Jersey is now warning it will try and force a climb-down if Ministers don't use their existing legal powers to do so.
It comes after the privately-owned utility company said on Wednesday it was left with “no choice” but to increase prices by 6.5% from today after allegedly being refused access to the government’s co-funded payroll scheme.
Ian Plenderleith, Managing Director of Jersey Gas says the company had has seen a 50% drop in revenue due to the lockdown as it supplies 70% of the Island’s hotels, restaurants and leisure facilities.
But the government has hit back at the allegation they have refused support, saying Jersey Gas had “chosen” not to provide “vital financial information” on their business and their parent company despite several requests to do so.
Pictured: Ian Plenderleith, Managing Director of Jersey Gas.
“Jersey Gas is owned by Isle of Man based International Energy Group, which is in turn owned by a private equity fund,” the government stated.
“Before committing taxpayer support, the government needs to understand what investor or lender support has already been sought by IEG and its owners, and why Jersey Gas does not have access to sufficient working capital of its own. This information has also not been received from Jersey Gas.”
The Minister for Economic Development, Senator Lyndon Farnham, called on Jersey Gas to halt its “insensitive” increase.
Pictured: Senator Farnham warned he would consider “all steps available to Government” to ensure the utility company acts appropriately towards all of its stakeholders.
He warned that he was considering “all steps available to Government” – including those provided for under the Jersey Gas Company (Jersey) Law 1989 – to ensure the utility company acts appropriately towards all of its stakeholders, saying he was not prepared to see islanders “suffer added hardship during this difficult time”.
The law cited by Senator Farnham allows the government to force price changes on Jersey Gas if deemed necessary.
It also allows the government to take shares in the company or take it over entirely with 12 months' notice.
Now Reform Jersey has stepped into the dispute, urging the government to force Jersey Gas to backtrack, describing the company’s decision to increase prices as unacceptable “at a time when Jersey is going through the biggest public health crisis in a century and many islanders have seen a drop in their incomes”.
The party is calling on the Government to use its legal powers “to reverse this planned rise in prices and force Jersey Gas to return to the table to discuss an appropriate support mechanism”.
“We stand ready to lodge our own proposals to achieve this is necessary,” they added.
Pictured: Deputy Geoff Southern, who is asking for the government to support Jersey Gas staff.
Reform Jersey’s move is even more surprising given that one of its members, Deputy Geoff Southern, published a proposal - due to be debated on 12 May - calling for Jersey Gas to be included in the co-funded payroll scheme or provided with "similar financial assistance".
In a report accompanying his proposals, he described Jersey Gas as a business that appeared to have "fallen through the cracks" and argued that if the company lost its “trained workforce with specialist technical knowledge of the industry” it would be difficult for it to resume normal business once out of lockdown.
Having obtained Jersey Gas accounts for 2018, Express has asked for clarifications on the financial situation of the company as well as why the company has not provided the information asked by the Government.
At the time of writing, answers to these questions have not been received.
Pictured: The Government says it has discussed over possibilities of direct funding with Jersey Gas, but that utility companies remain ineligible for Payroll Co-funding.
Contacted by Express for an update on the ongoing row, government officials reasserted yesterday that utility companies were not eligible for Payroll Co-funding.
However, they said they had discussed over possibilities of direct funding with Jersey Gas such as the Loan Guarantee Scheme or Jersey Recovery Fund to help with working capital.
"To qualify for this funding a company needs to provide information on their finances, their parent group and an explanation of any financial transactions that have taken place between the various parties," a spokesperson said, adding that the government still reserves its position to use legal powers to protect islanders during this challenging period.
Further discussions are due to take place between both parties today.
Pictured: Islanders have been voicing their frustration against Jersey Gas on social media.
Public opinion of Jersey Gas appears to have suffered as its war with government intensifies, with some even calling for people to stop paying their bills or switch to other energy sources.
“If all business' had this belligerent self entitled attitude and passive aggressive attitude towards the States because they're not paying ball with handouts, it will be costing you £70 next time you go for a coffee, seriously what a disgrace, I hope every one switches to electric when this is all done!” one islander wrote on social media.
“Disgusting time to up prices, J. Gas. You have no idea how low you have now become. People are struggling with the little amounts of money they have. Shame on you,” another added.
“If Jersey Gas is facing such difficulties after only a couple of slow months, then perhaps, like many other companies, questions should be asked of it’s financial structure and why it’s in such poor form,” noted another critic.
Comments
Comments on this story express the views of the commentator only, not Bailiwick Publishing. We are unable to guarantee the accuracy of any of those comments.