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Sark Electricity butts heads with price regulator again

Sark Electricity butts heads with price regulator again

Friday 28 October 2022

Sark Electricity butts heads with price regulator again

Friday 28 October 2022


Sark's prices watchdog has again assessed local power prices to be unreasonable - but the island's electricity company claims its calculations are skewed.

Dr Anthony White has recommended prices for the utility since 2018, but these expired at the end of 2021.

On Wednesday, the Price Commissioner announced a “preliminary conclusion” that prices charged by Sark Electricity Limited (SEL) are unfair.  

Usually this would see a fresh price control order to set maximums on tariffs, but Dr White is set to leave the role next month and SEL have been granted time to reconsider its pricing structure. 

Alan Witney-Price, Managing Director of SEL, continues to maintain that the OPC’s assessments are based on incorrect assumptions, specifically by including 200,000 units of electricity which are not sold by the utility. 

“In making this determination, The OPC has continued to include island wide sales. It is only right, therefore, that SEL makes one specific observation in respect of the determination itself,” he said. 

“The principal disagreement between SEL and the OPC comes down to the inclusion of island wide sales or ‘The Island Total’. The inclusion of island wides sales dramatically skews our available revenue and pushes SEL into a negative operating position.

“Basing SEL’s price on what it actually sells is a fundamental need for any business.”

Sark_Electricity_La_Coupee_little_sark.jpg

Pictured: Sark Electricity and the island's government have recently been in dispute about an ageing cable at La Coupeewhich powers Little Sark.

Mr Witney-Price noted that the OPC itself highlighted that point in its recent determination.

It reads: “If ‘own generators’ decide to take advantage of these arrangements, whereby they can exchange power with SEL at fair prices, I believe it would be appropriate to adjust SEL’s revenues according to the amount of electricity it sells over its system, rather than the island total.” 

Mr Witney-Price argues that whilst those who self-generate can exchange power with SEL they are under no obligation to do so.

Stocks Hotel generates some of its own electricity, whilst also using the grid, and consumes everything it creates.

“This is a commercial decision for them to make," said Mr Witney-Price. "SEL should not be penalised for this decision by Stocks Hotel which is entirely outside of its control.

“SEL is delighted that The OPC has now formalised this position and that this reality should now feed into price determinations moving forward. This will have the effect of significantly reducing friction between The OPC & SEL.

“In light of this policy adjustment, and a range of other matters touched on in the determination, SEL believes that it can indeed arrive at a price that a future OPC will find fair and reasonable. While the situation is unusual SEL welcomes this opportunity, to respond to The OPC observations in this manner and we will do so in the coming weeks."

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