Price control order for electricity on Sark

A price control order will come into effect by the end of September

The price of electricity in Sark has been deemed "neither fair nor reasonable" after an investigation by the island's price control commissioner.

Shane Lynch, price control commissioner for Sark Electricity Limited (SEL) said he intended to introduce a price control order, to come into effect from midnight on 30 September "at the latest".

The investigation followed two price rises by SEL in two days in August, taking the unit price from 49 p/kwh to £1.13 per unit.

A spokesperson for SEL said they were planning to appeal the determination and believed a negotiated resolution was in the interests of all stakeholders, rather than court proceedings.

Mr Lynch said: "I now intend to make a price control order which will set a maximum price which SEL can charge."

In a report published on Tuesday, Mr Lynch said he was required to consult with SEL before making the price control order, but he did "not intend to consult with any other persons".

At the time of the recent price rises, which came into effect on 1 September, SEL said the rise included 60p of levies for legal fees.

He said his office received a letter of response to the consultation from SEL legal representatives late on Tuesday evening, the last day of the process, which stated they were not participating because they considered the process to be "unlawful".

'Injunctive relief'

A spokesperson for SEL there were "serious procedural irregularities within the process" and they had put the energy performance certificates (EPC) on notice that this determination was being appealed.

They said the company was seeking "injunctive relief to prevent any subsequent price control order from taking effect until determination of those proceedings".

"The idea that a company cannot recover its legitimate expenses through its trading operations is simply ludicrous," the spokesperson said.

"Especially when that company is being dragged into court by a hostile customer; in this case Chief Pleas itself."

They said if the Chief Pleas lifted its block on the sale of SEL then the legal challenges would be unnecessary, and the September price would likely be applied at 53.7p and not £1.13p per unit.

"That decision, however, is Chief Pleas to make and they have a short window to reach out and resolve this issue before billing begins at the start of October; only two short weeks away," they said.

Conseiller Mike Locke called the price control "a good piece of work"

Conseiller Mike Locke, the chairman of the island's Future Energy Committee, said he welcomed the price determination.

He told BBC Radio Guernsey: "I think it means there's been an outbreak of sense on the situation.

"It's a good piece of work and I thoroughly support it.

"As of 30 September, the price of electricity will be controlled once more to a sensible, reasonable level."

Mr Lynch told BBC Radio Guernsey on Wednesday: "I'm fairly experienced in the industry and when I see a price of £1.14 p/kwh, by far the highest in the world, it would be pretty obvious to even someone who is not experienced that it doesn't sound very reasonable.

"I have no intention of recusing myself from a process and very shortly I will be consulting on to a price control order and it is my intention to have a price control in."