EPC Commissioner launches island-wide consultation

The recently appointed Electricity Price Control (EPC) Commissioner, Shane Lynch, has announced that it is his intention to make a Price Control Order likely to take effect from 1st April 2023. However, prior to this, he will be conducting an island-wide consultation, hoping to have input from the current power supplier, Sark Electricity Ltd (SEL), resident consumers and any other interested person.

In his notice, Mr Lynch confirms that he will consider the new SEL tariffs which seems to have been widely welcomed across the island; the new tariff structure consists of a unit price of 53 p/kwh and a monthly connection fee of £10 per meter. The Commissioner will also consider changes in actual fuel prices, inflation and forecast consumption.

The Office of the Electricity Price Control Commissioner has recently published an information notice regarding the consultation which can be found at www.epc.sark.gg. Mr Lynch confirms that he is particularly interested in the following:

1. Do you consider that my proposed allowances for fixed operating costs, depreciation and return on investment are fair and reasonable?

2. Do you consider that it is fair and reasonable to use SEL’s actual fuel purchase costs?

3. Do you consider that it fair and reasonable to have a monthly correction mechanism to account for the fact that the actual values for fuel costs, consumption and other revenues will be different from forecast?

4. Do you consider that it is fair and reasonable to have an annual correction mechanism to account for inflation and changes to the RAB arising from depreciation, inflation or new capital expenditure?

5. Do you consider that 5% real is a fair and reasonable rate of return on investment?

6. Are the new tariff arrangements for own-generators trading electricity with SEL fair and reasonable?

7. In light of the new trading arrangements for own-generators, is it fair and reasonable to continue to use island-wide consumption to determine the fixed cost component of the unit price cap?

8. In light of the fact that the formula for determining the unit price cap includes Other Revenues, do you think it is necessary to have a price cap for the monthly connection charge or for the monthly standby charge for own-generators?

9. Do you agree with my proposed term of two years for this price control, which is the maximum allowed by the 2016 Law?

He also adds:

Please send your responses by e-mail to [email protected] by 5 pm on Thursday 02nd March 2023. It is my intention to publish all non-confidential responses on my website. If you do not want your response to be published, please mark it as confidential.

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