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Sark's Government is preparing to compulsory purchase the island's only electricity company amid the latest power struggle with Sark Electricity.
Known as 'Chief Pleas', the island's assembly of politicians held an emergency meeting yesterday evening following an announcement that Sark Electricity Ltd could cease trading due to "financial difficulties".
The Sark Electricity Prices Control Commissioner, Dr Anthony White, told the residents of Sark that the island's only power company would be closing.
SEL Managing Director Mr Witney-Price (formerly Alan Jackson) has disputed Dr White's account of the letter, which he also sent to the Lieutenant-Governor of Guernsey - Sir Ian Corder - and the Seigneur of Sark - Christopher Beaumont.
In a statement, Mr Witney-Price laid the blame with government for not engaging with him. He insisted that he "will not continue funding the shortfall in SEL revenues from my own pocket", which he says are partly caused by price caps imposed by the SEPCC.
Pictured: Mr Witney-Price bought SEL in March 2020 and said he would be releasing his own statement shortly.
The strained history of Sark Electricity and Chief Pleas seems to be coming to a head, after months of threats, disconnections, and court orders. Most recently, 19 homes were disconnected from the grid following a land dispute, however all of the infrastructure remains on the resident's land.
It’s understood that Guernsey’s Civil Contingencies Authority has been briefed on the escalating situation, and that contingency plans are in place for any loss of power.
Chief Pleas last night considered a report with propositions drafted by the Policy and Finance Committee. Politicians agreed to first try to negotiate a deal for the company, with compulsory purchase if that does not prove successful.
Sark's Government agreed to start negotiations with the former owner, the late David Gordon-Brown, back in December 2018, only to allegedly "undervalue" the business.
Those failed negotiations have led to further years of uncertainty and public disputes over electricity prices between Sark politicians, Dr White, and both the former and current owners.
Dear Residents of Sark,
I am writing to inform you that the Managing Director of SEL has notified my Office, the Governor of Guernsey and the Seigneur of Sark, that the company “will shortly cease trading” due to financial difficulties.
We are all aware of the very deep concern this prospect poses to the people of Sark who rely on SEL as the sole supplier of electricity on the island.
Mr Alan Witney-Price (formerly known as Alan Jackson) claims that the closure of the power company is due to the Price Control Order (PCO) of 2019, later modified by the “Variation”, not allowing SEL to cover the costs of operation and make a return. However, my recent analysis of SEL’s (unaudited) financial information suggests that, were it not for SEL’s discretionary expenditure on legal advice, SEL would have been profitable during 2020, according to UK accounting practice. A similar pattern is emerging in 2021, although I am still waiting for some information and comments from SEL which would provide further clarity.
Residents may remember that the PCO was designed to protect SEL’s profits from variations in electricity consumption and fluctuations in the price of fuel. However, as I explained in the Variation, I do not believe it would be fair to expect customers to protect the company from the consequences of, in my view, ill-judged actions of its management. These have led to the loss of sales to “own generators”, as well as to the 19 properties at La Tour. SEL has also, in my view, unnecessarily incurred substantial legal costs. I do not believe it would be reasonable to expect customers to bear the consequences of such unfortunate decisions.
Against the above background, and as I have indicated to SEL's management, I remain open to discussions with representatives of SEL and am prepared to consider any representations made on the company's behalf in connection with the views I have formed and decisions I have taken in the discharge of my duties under the Control of Electricity Prices (Sark) Law, 2016.
I have kept Chief Pleas up to date with SEL’s announced intentions and I understand that plans are in place, should SEL cease trading.
SEL has not provided my Office with the figures I require to adjust the maximum unit price of electricity, as required by the recent Variation. Given the current level of diesel fuel prices, I will leave the price for July at 53 p/kWh. I may adjust future prices when the information becomes available.
Anthony White
Commissioner
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