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So...What just happened in Sark?

So...What just happened in Sark?

Monday 03 December 2018

So...What just happened in Sark?

Monday 03 December 2018


The tiny island of Sark avoided a big power outage on Friday and managed to keep to salvage their electricity despite negotiations coming right down to the wire.

The electricity crisis is resolved for now, but what sparked it in the first place?

For those with questions, Express is here to illuminate the issue...

Sark's government managed to strike a last minute deal with its electricity company, Sark Electricity (SEL), just hours before the island was threatened with a total power cut until Easter due to the utility heading for bankruptcy.

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Pictured: The tiny island of Sark narrowly avoided a big power outage thanks to a last-minute deal between the utility and the government.

The electricity provider was threatening to switch off power generators on Friday, having reportedly been driven to bankruptcy by charging limits placed on it by the government.

The dispute kicked off over the prices SEL was charging, which Sark's newly appointed Electricity Price Commissioner was trying to slash from 66 pence a unit to 52 pence. The utility's owner, David Gordon-Brown, said that this price cut would reduce his earnings by £20,000 a month and threatened to walk out - leaving Sark completely in the dark.

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Pictured: Sark Electricity owner David Gordon-Brown was threatening to walk out as Sark's only power provider.

Despite uncertainty over negotiations, a deal was struck between SEL and the Sark government in the early hours of Friday morning. 

The deal states that:

  • the original prices SEL were charging will be reinstated;
  • Sark's government will spend three months valuing the company before purchasing;
  • Mr Gordon-Brown, will stay in place for those three months and help with the transition;
  • there will be no retroactive payment for when prices were dropped in the summer;
  • SEL will drop their Royal Court appeal


What happens now?

Going forward, SEL could evolve in a number of ways. The exact structure it will take will be indicated in a vision document Sark's government are producing surrounding the island's energy production. 

The island's Seigneur - the Head of Sark - Major Christopher Beaumont told Express that he would be closely involved in the process going forward: "There are lots of potential structures that could be put in place that don't mean Sark Electricity remains in the hands of a single entity, we could put a much more social model of ownership in place, for example. I have views of how I would like people to be buying into energy production.

"It's been a long process, but there is a vision document being put together on the future of Sark energy, so how Sark will manage its energy budget. That goes beyond electricity - there is a big piece of work to be done."

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Pictured: Sark's Seigneur will be closely involved in the process going forward to ensure the purchase goes smoothly.

"So there is a vision statement that is in the late stage draft, and then for the future, it's a question of how do you weave what we have into what we want. From my perspective, this is a long term project."

Although the deal has been struck, the question still remains as to what has changed about the standoff between the utility and the government. Previously, Mr Gordon-Brown has offered to sell SEL to the government, but they have not been able to conduct enough due diligence on the company to go ahead with any purchase. Meanwhile, prices are back to their original heights.

The Seigneur said the key difference now was that everyone was on the same page: "To start the valuation process with an agreed terms of reference, so that we are all happy that the evaluators are doing something that both sides understand, makes it then become a consensual process, whereas before it's been an adversarial process."

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Pictured: A temporary generator outside the island hall - just one of the measures residents had taken to prepare for the worst as negotiations came right down to the wire.


"If you live on a rock, you become resilient"

One concern put to the Seigneur was how the dispute put Sark in the national spotlight in a negative way. The potential of "Sark going dark" was featured on national news, and also called into question the relationship between the island and the UK. Lord Richard Sanderson Keen, the UK Minister responsible for Crown Dependencies, said if lights did go off there was the potential for the UK to intervene, which could have had wider implications for Sark and Guernsey's constitutions.

But Major Beaumont argued the deal being struck at the last minute did not show Sark in a bad light. Rather, he said, it proved they could pull together in a mature way and resolve problems: "It has offered everyone an opportunity to see that will is there and the capability is there, and it shows everyone that the community of Sark is very capable of pulling together. It has a can do attitude. It looks after itself and looks after other people. I'm delighted to have seen everyone acting so well in the face of what could have happened. 

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Pictured: Sark Electricity - the company which said that it was heading for bankruptcy if the government tried to slash their prices.

"I think we could guarantee people's safety. I'm absolutely convinced that our people would have just gone about their lives in the usual way. If you live on a rock, you become resilient. This shows the island doesn't need to go elsewhere for help." 

As to why the deal was struck at the final hour, he said: "These things always take so long, a negotiation goes down to the wire because you're keen to get the best deal you can. A deal is never done until it's done and that was always going to take a long time."

 

The sigh of relief...

Speaking on behalf of Sark's government, Chairman of Policy and Finance, William Raymond said he was glad the whole situation was over with.

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Pictured: Sark Chairman of Policy and Finance, William Raymond said that he was relieved the energy crisis had been averted.

"It had to be resolved, because there are people here - we don't have a hospital - they depend on home treatment, some of that is powered by electricity. What price is life?"

He also confirmed the Price Commissioner would stay in place, despite his first decision now being overruled. 

The owner of Sark Electricity added that he was happy with the deal, and would move to Canada to be with his family when the transition period was completed.

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