The rise is only the fourth in Jersey in seven years, and the first for 15 months after we deferred our planned April 2020 2.5% rise by six months to October 2020 to help those affected financially by the pandemic, at a cost to the Company of £1m. This is in sharp contrast to the UK where escalating gas prices, low wind generation and fire damage to the landing site of a major undersea supply cable have combined to cause double-digit electricity price rises, and with more expected to follow.
Ofgem, the UK energy regulator raised its price cap by a further 12% from 1 October, following a 9% rise in April 2021. This means an average UK consumer on a standard variable tariff has seen an increase of over 20% in power prices this year. Furthermore, the regulated electricity tariff in the UK is now 46% higher than the standard domestic rate in Jersey. Analysts are predicting a further double-digit rise in the UK price cap in April 2022.
Our CEO Chris Ambler said: ‘We always strive to minimise the impact of any tariff rise on our customers, and we seek to maintain stable pricing over the longer-term. Islanders have been greatly shielded from the worst effects of this current period of unprecedented energy market volatility due to Jersey Electricity’s hedging policy whereby we fix the price of portions of our power and foreign exchange requirements up to three years in advance.
‘This affords Jersey important shorter-term protection so the impact on our customers is not as pronounced as seen elsewhere. Any tariff rise is unfortunate, but this 4% rise is far lower than would have been the case if this contract and our hedging policies had not been in place. In addition, our strategy to import electricity that is already virtually completely decarbonised means prices in Jersey are not subject to the green tax levies imposed in the UK as it strives to decarbonise its electricity supply to meet carbon neutrality targets.’