JERSEY Electricity has said a “challenging energy environment” is behind its decision to increase prices by 7.5% from January.
The new year price rise is 2.5% above the Island’s latest inflation figure and will add around £2 to the existing weekly electricity bill of around £27 for the average Jersey household.
Jersey Electricity has admitted that price rises are “unwelcome” but stressed that customers in the UK pay around 50% higher than those in the Island, with bills rising by an estimated 66% in the two years to July 2023, and estimates that consumers in the other Crown Dependencies pay around 30% more. Guernsey Electricity brought in a 10% price rise in July of this year.
Asked by the JEP why JE had announced an above-inflation rise, chief executive Chris Ambler said the utility firm always aimed to increase prices at below the level of inflation.
But he claimed they had been left with no alternative on this occasion.
“If you look at prices over the medium and longer terms, then our prices have risen below inflation,” he said. “On this occasion we are above it, but it still leaves Jersey consumers with significantly cheaper prices than anywhere else.”
The background to higher energy prices across Europe was attributed by Mr Ambler to “turmoil” in wholesale markets. Customers in Jersey had been protected from the worst of this situation, he added.
“Turmoil in the international energy markets and the onset of Russia’s invasion of Ukraine have contributed to high and volatile wholesale energy prices across Europe and much of the world in recent years,” he said. “Against this backdrop, we are starting to see signs of a more stable energy environment emerge, albeit with higher levels than what has historically been the case.
“Our strategy of importing clean renewable electricity from France has helped to maintain relatively stable electricity prices, whilst making necessary investment and future-proofing the Island’s electricity network.
“While we understand increases in electricity prices are unwelcome, we have worked hard to shelter customers wherever possible, including continuing to challenge ourselves to drive further efficiencies.”
Through its supply contract from France, in which JE has fixed prices for around one third of its imported electricity through an agreement lasting until 2027, the company has been able to avoid some of the volatility seen elsewhere.
A policy of risk management, including hedging – a protective strategy reflecting the attitude of a business toward risk – has also contributed to this outcome.
Mr Ambler said this strategy helped JE shelter customers from the worst effects of the “challenging energy environment”. He estimated the policy had helped avoid an estimated £200 million in energy costs for the Island, equating to around £4,000 to £5,000 per household, since the Russian invasion of Ukraine in February 2022.
In addition to the forthcoming rise in the cost of electricity, Islanders have faced steep hikes in gas prices in recent years, including rises of 13.2% in October 2021, 5% in November 2022 and 12% in February of this year.
Islands Energy Group, which supplies Jersey’s gas, said it had no news on whether a further price increase would be implemented during the coming winter.
JE is encouraging customers with concerns about their electricity bills to contact its customer care team by emailing jec@jec.co.uk or calling 505460.
Jersey’s rate of inflation has fallen so far this year, from 7.5% at the end of December to 5.7% for the year to 31 March and again to 5% by the end of June, with the latest data for the third quarter of 2024 due to be published later this month.
