The utility company has said it has no choice but to enforce the temporary hike because of a lack of financial support from the government.
But the firm have been accused of blind-siding customers, with Deputy Geoff Southern, who has lodged a proposition to include Jersey Gas in the government’s co-funded payroll scheme, saying it ‘smacks of a ransom situation’.
Jersey Gas are not eligible for government support under the payroll scheme, although the company’s senior officials have been locked in negotiations with ministers and civil servants to see if they can access the financial support. Jersey Gas said gas sales had fallen by 45%.
After talks with the government failed to end in a resolution, the company issued a shock announcement that prices would temporarily rise by 6.5% from 1 May, with managing director Ian Plenderleith saying the company had been left with no other choice following three weeks of discussions.
The company, which is owned by Isle of Man-based International Energy Group, which in turn is owned by a private equity group, have been accused of failing to provide the government with financial information on their business and parent company.
Economic Development Minister Lyndon Farnham said: ‘The overarching aims of our government support schemes are to ensure businesses do not close and Islanders continue to remain employed, and can maintain their livelihoods.
‘I ask Jersey Gas to engage constructively with government and to show transparency of financial information and transactions, so a full and considered response can be provided to them as soon as possible. I would urge Jersey Gas not to follow through with the planned increase while discussions are taking place.
‘A price increase of this magnitude comes at a time when many Islanders are experiencing financial insecurity and is particularly insensitive. I am not prepared to see Islanders suffer added hardship during this difficult time and will consider all steps available to government – including those provided for under the Jersey Gas Company (Jersey) Law 1989 – to see that Jersey Gas acts appropriately towards all of its stakeholders.’
Under the terms of the law, the States can apply to the court for an order that ‘all property, liabilities, rights and obligations of the company shall be transferred from the company to the States’.
Deputy Southern said: ‘I am disappointed in both sides of this. The company shouldn’t at this time be putting up prices when customers are losing their jobs.
‘And I am disappointed with the [Economic Development] minister [Lyndon Farnham], who said something would be coming forward this week.
‘A 6.5% rise is not doing the gas company any favours. I think it smacks of a ransom situation.’
The company have said they have had to make the temporary move to ensure a continuation of a safe, secure and reliable service to its customers.
In a statement, managing director Ian Plenderleith said: ‘We understand the financial challenges many of our personal and commercial customers will be facing at the moment, and we are very sensitive to adding additional financial burden at a time like this, but we have simply been left with no other choice.
‘We are grateful to all of our very loyal customers and we are determined in these unprecedented times to continue to deliver our high-quality, safe and reliable service.
‘However, as we have received no assurances from Jersey’s government that we would receive short-term support to offset the negative economic effects of the pandemic, we have no other choice but to take action to counteract the shortfalls we will face and to guarantee a safe and secure gas supply to the Island’s homes and businesses.
‘I must stress that these changes will only be temporary, until such time as the full economic impact of the pandemic is more accurately known.’
Jersey’s Consumer Council said the short notice of the rise was ‘unacceptable’.
JCC chairman Carl Walker said: ‘It is a great shame that Jersey Gas’s customers – the very people it is there to serve – are the ones caught up in the middle of this dispute.
‘Hitting Islanders with such a significant price hike, especially when times are so tough, is the last thing they need.
What the statement has not made clear is whether this is an increase on just the gas used, or the standing charges also. If the former, at least the impact will be kept to a minimum, as the weather is warmer, so fewer people will be heating their homes.
‘Also, while Jersey Gas has said the increase is only temporary, it is not clear exactly what will constitute normal, and therefore when prices will return to normal.
‘While it is not for the Council to get involved in disputes of this nature, we also do believe that consumers should have been given more notice from Jersey Gas.
‘Two days’ notice is not really acceptable.’
