ELECTRICITY prices are set to increase by 5% in July and by the same amount in January due to ‘unprecedented’ volatility in the energy market, amid growing concerns over the cost of living in the Island.
Jersey Electricity said the rises would add around £2 a week to the average domestic bill by 2023 – with major price hikes being experienced in the UK, Europe and elsewhere.
The news comes as the cost of living continues to increase, with July’s electricity rise slightly below the Island’s recently announced inflation rate of 6% – the largest jump since the 2008 credit crunch.
Housing and fuel have also been subject to significant increases in recent months, with Jersey Gas customers seeing a 13.2% price hike in October.
Jersey Electricity chief executive Chris Ambler said: ‘Islanders are aware that global and European energy markets are in turmoil. We are receiving increasing volumes of calls from customers concerned about what prices might do here in Jersey following press announcements covering national and international price rises.
‘As an example, the Isle of Man recently announced the retail price of electricity will rise by 30% between this April and July.’
He added that Islanders had been greatly shielded from the worst effects of the ‘unprecedented’ energy market volatility because Jersey’s electricity was procured under a long-term contract that allowed for hedging up to three years in advance.
‘Although the electricity prices we pay for the 2022-24 period are largely hedged, we are not fully hedged nor completely immune to this volatility,’ Mr Ambler said.
‘By announcing our intentions now, we hope to give Islanders more confidence that our electricity prices will be relatively stable over the coming months and over the winter period, when more electricity tends to be used.
‘Islanders have been greatly shielded from the worst effects of this current period of unprecedented energy market volatility because our electricity, which is sourced from lower-cost and low-carbon nuclear and hydro-electric generation, is procured under long-term contract that allows for hedging our requirements up to three years in advance and affords the Island certain price protections.’
Mr Ambler continued: ‘Despite the planned increases in Jersey’s electricity prices, we expect them to remain at just over half the level of UK prices.’
Energy prices in the UK grew by an average of 22% last year, and rose again by 54% when UK government regulator Ofgem raised the price cap on a standard variable dual-fuel tariff on 1 April.
Another 40-50% rise is predicted to occur when the UK price cap is reviewed again on 1 October.
The planned price rises in Jersey are due to take effect from 1 July and 1 January 2023.
In a bid to help struggling Islanders, the government has introduced a ‘Cost of Living Temporary Scheme’, providing an extra £20 a month to Islanders struggling to pay their bills.
It will last until the end of the year and can be accessed by over 11,000 people, with the first payments having been issued recently (full story: page 7).
