CICRA (the Channel Islands Competition and Regulatory Authorities) has launched a market study into the supply of electricity in Jersey.
CICRA Chief Executive, Andrew Riseley, said the principal aim of the study was to identify whether Jersey electricity prices were fair and reasonable.
“Electricity is an important component of weekly expenditure for Jersey households and local businesses,” said Mr Riseley.
“We are very aware that, in the current economic climate, there is significant pressure on household budgets and we want to ensure that consumers are getting a good deal from their electricity supplier.”
“Jersey imports most of its electricity from France via submarine cables but also needs to be able to generate its own electricity in case the supply from France fails. We will be analysing the costs and tariffs of Jersey Electricity PLC (JEC) in some detail and benchmarking them against similar electricity operators elsewhere.”
“We will seek to determine whether JEC is a reasonably efficient operator having regard to the burden it bears with respect to security of supply.”
CICRA intends to analyse cross-subsidies between JEC’s core business (i.e. the supply and distribution of electricity) and its non-core businesses (e.g. the retail park at Queens Road), and also to look at whether there are barriers to potential future competition from investment in renewable energy sources.
“While the States of Jersey holds a majority shareholding in JEC, a significant minority of its shares are privately-held and traded on the London Stock Exchange,” Mr Riseley said.
“The States currently has power to set JEC’s tariffs under legislative provisions dating from 1975. We will also consider whether it would be appropriate to recommend modifications to the arrangements for regulation of the electricity sector in Jersey.”
“JEC will be working with us through the course of this review and we expect the electricity sector market study to be completed in three to four months.”
This study follows CICRA’s previous reviews of the Jersey motor fuels and heating oil markets in 2011. CICRA intends to complete its investigation of energy markets by undertaking a review of the supply of gas to households once the electricity market study is complete.