Alderney set to raise electricity price cap

The measure could lead to an increase on typical domestic electricity bills of about 20% in 2023

Electricity prices in Alderney could go up in 2023, depending on market volatility for diesel which the island's generators use, the States has warned.

The Policy and Finance Committee has agreed to raise the price cap from 50p to 60p per unit.

The cap sets a maximum price Alderney Electricity Ltd (AEL) can charge for each kilowatt hour of electricity.

The increase is subject to approval by the full States of Alderney next year.

AEL raised its prices earlier this year, but also introduced a cost relief for customers for three months from 1 May.

'Upgrade plan'

The draft Ordinance to be placed on the Billet does not commit to an increase in electricity prices, but allows AEL the flexibility to quickly respond to market forces, within the constraints of the revised cap.

The States of Alderney said if activated in full, the measure could lead to an increase on typical domestic electricity bills of about 20% during 2023 - less than £25 per month for most households.

Under the existing 50p price cap and rising world fuel prices, AEL would be unable to meet financial expectations and maintain its current infrastructure, the States said.

It said improved network efficiency and station upgrades had helped to keep prices down.

AEL managing director James Lancaster said: "We have budgeted for a worst-case scenario and it may be that fuel prices will begin to return to normality enabling underlying electricity prices to be brought back below the level of the current cap.

"Projected growth in both capacity and functionality in line with the current upgrade plan, and future plans in line with Energy Policy objectives, will require that we deliver a net profit margin of twice the current targeted level.

"Any benefit AEL may derive from lower than anticipated fuel prices or other costs next year can be targeted toward such improvements."

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