From 1 July, we’ll all be paying more for our electricity after the States gave Guernsey Electricity permission to up its revenue by 8%.
That extra money will come from us through a mixture of unit and standing charge increases.
The utility had asked to take 9.5% from its customers to meet rising import and generation costs along with essential maintenance and investment to the power station and grid. However, the States Trading Supervisory Board limited the increase to 8% and it’s told GEL that it must make savings over the next two years to reduce the need for future tariff increases.
STSB President, Deputy Peter Roffey said his committee agreed to that 8% revenue increase – which will come directly from consumers pockets – because of the additional cost that GEL is incurring, and the need to keep investing in our electricity infrastructure for both the short and long term.
One of the main reasons behind the increased costs is the imminent end of GEL’s long-term import price agreements.
It’s understood that we’ve been shielded from some increases because of the fixed price GEL had previously agreed when signing up to long term contracts to import our power.
Deputy Roffey said the cost of both importing and generating electricity has risen significantly since then.
“Islanders have been relatively fortunate to have been largely shielded from the massive hikes in energy bills we saw happening elsewhere in recent years. That is thanks to the fixed price agreements that were in place for the electricity that we import. Those are ending so we are having to adjust to wholesale market prices,” said Deputy Roffey.
“At the same time, we have to face up to the fact that for years bills were kept artificially low, which starved Guernsey Electricity of the funds to adequately invest in the network. Unfortunately customers are now having to pay the price of that, and we do not want to repeat that mistake and burden future consumers.
“The STSB has therefore acted responsibly in approving an increase, although not to the level that Guernsey Electricity had requested. This follows an independent assurance review of its application. There is also an efficiency target that will require them to focus on reducing costs and passing those savings on to customers.”