Lower costs drive drop in Sark electricity prices

Lower fuel prices and higher demand had a downward effect on prices, the regulator said

Electricity prices have fallen by 6p per kilowatt hour (kWh) in Sark, according to the island's power regulator.

Sark Electricity Prices Control Commissioner Shane Lynch said costs were now capped at 43p per kWh, down from from 49p per kWh under the previous cap.

It said in August fuel prices were 14% lower than forecast and consumption was 15% higher than forecast.

Mr Lynch said both factors had a "downward effect on prices".

"It is not possible to say for sure what will happen to prices in the months ahead," he said.

The commissioner said the regulated price of electricity in Sark was determined by adding the allowance for fixed costs, such as salaries, to the forecast fuel cost, and then dividing it by forecast demand.

If actual fuel costs turn out to be lower than forecast, or demand turns out to be higher than forecast, the price charged will have been deemed too high, Mr Lynch said.

The additional amount paid by consumers is then recorded in a balancing fund.

Mr Lynch said: "Once this fund exceeds £5,000 the price in the next month is reduced such that the balance goes to zero.

"However, the price in the months after this will return to the default price of 54p per kWh unless and until the balancing fund exceeds £5,000.

"It is not possible to say for sure what will happen to prices in the months ahead."