3rd December 2021

ISLANDERS SEEK CLARITY AND SURETY

On 27th November 2021 the Office of the Price Commissioner (OPC) released what will probably be its final electricity price variation. Pricing for December has been capped at 53p/kWh. This pricing variation is the seventh change this year and is a 7p drop on the November price cap of 60p. It is slightly less than the average pricing for 2021 which was 54p/kWh. This last variation, which will expire on 19th December 2021, marks another milestone in Sark’s often torturous journey of electricity provision and it is a significant change for Sark. The Sark government, when asked in October what it will do to protect Sark residents from potentially increased tariffs once the Price Control Order (PCO) lapses, stated that it “could not offer guarantees.” This precarious situation is further compounded as battle lines are drawn and the Island progresses its intention to impose a compulsory purchase order of Sark Electricity Limited (SEL) and all of its assets.

The current PCO was enacted in December 2019, and it had a duration of two years; this means that it will expire 19th December 2021. In his November pricing variation Anthony White confirmed:

“Two years is the maximum time allowed under the 2016 Law. I am keen to understand the basis on which SEL will set prices in the absence of a PCO.”

On 27th November 2021 a more recent variation notice explained that:

“Last month I informed residents that the Price Control Order (PCO) expires on 19th December 2021. I may only set another if I have first determined that the prices charged by SEL are not fair and reasonable. SEL has not shared with me the future tariff, nor, for that matter, has it informed me of its plans for next year. I must, therefore, wait for SEL to announce its tariffs before I investigate whether another Price Control Order is required. On Thursday, I received SEL’s consumption figures for September and October. These demonstrated that Island Wide unit sales to 31st October were ~1,173,000 kWh, 2.7% higher than assumed in the Variation. However, fuel costs have risen by 63% since December 2020 when I set the Variation and SEL’s receipts from the minimum usage charge have been 28% lower than assumed.”

So, what will happen next? In mid-December Sark will be in the depths of winter. The nights will draw further in, temperatures will likely fall, and people will start to use more electricity to heat and light their homes. It is at this time that the cap on electricity prices in Sark will be removed. Christmases on Sark made the national news in both 2018 and 2019 when we saw threats to cut off our electricity supply. Will history repeat itself this year?

In June 2021, following the latest threats to the Island’s electricity supply, Sark’s Policy & Finance (P&F) called an emergency meeting of Chief Pleas. At this meeting it was agreed that the Island would enter into negotiations to purchase SEL. It was also agreed that Guernsey’s Law Officers would be asked to draw up legislation to enable a compulsory purchase should negotiations fail.

At neither the Midsummer meeting held on 7th July 2021, nor the Michaelmas meeting of 6th October 2021 were there any statements or agenda items relating to the progress of negotiations with SEL, but, at yet another Extraordinary meeting on 17th November 2021, an information report appeared and a draft Projet de loi was presented to the House. Conseiller Guille as Chair of P&F presented the report. Policy & Finance claim that they have sought to negotiate with Mr Witney-Price but:

“… to date, Mr Witney-Price [owner of SEL] has not accepted the offers to enter into mediation and it has not been possible to progress this matter.”

“Negotiation of an acquisition by consent remains the preferred way to progress this matter, with acquisition by compulsory purchase being a last resort. However, the risk that the supply of electricity to residents may cease or is at significant risk of being discontinued, remains.”

“If ownership cannot be acquired by the consent of each party (through a negotiated purchase), the Committee consider it proportionate and necessary to acquire the assets of SEL/SEHL through compulsory purchase to ensure continuity of electricity supply to islanders on a stable and predictable basis.”

“The draft legislation has been prepared to enable a fair balance to be reached between the interests of the wider community with those of the individual property owner, in a way that respects the international obligations to which Chief Pleas has committed, including the European Convention of Human Rights.”

“If a purchase is negotiated then the capital funding required will need to be raised through negotiations on lending and investment either with the States of Guernsey or through commercial borrowing, possibly by private equity investment.”

“The community in Sark can be assured that, alongside the compulsory purchase legislation, Chief Pleas also has robust contingency plans in place should there be an interruption in the electricity supply. These have been developed further following the threat of the cessation of supply in the winter of 2018 and can be initiated at short notice if necessary.”

“This draft legislation will ensure acquisition of the assets of SEL/SEHL can take place if negotiations are unsuccessful. This would likely be an important step to take should the SEL/SEHL cease trading or should supply be cut. It would be vital at that stage for Chief Pleas to take control of the supply of electricity to the entire island. This step may be necessary to prevent an emergency occurring by taking proactive steps rather than having to respond to an emergency after the event.”

“A copy of the draft legislation was sent to SEL on 5th November 2021 with a response time of 28 days. The Committee will, in conjunction with the Law Officers, consider the responses during the following seven days with the intention to return to Chief Pleas at the earliest opportunity after that time.”


The House was in agreement that the situation couldn’t continue and several Conseillers stated their intention to support the propositions when they came to Chief Pleas in December. Conseiller William Raymond questioned the wisdom of using the Sark Court to appoint the valuer rather than an industry body because the Seneschal is compromised as a user of Sark Electricity. He also expressed concerns about the probable length of time between the sanction of the legislation and the actual acquisition of the assets:

“My concerns are on the timescale and that is particularly reinforced by the survey report and the responses that we have had in the last day or so from the company. If we pass the legislation in December, there is then a period when it will be processed before it may receive Royal Assent in February. A valuer then has to be appointed and the valuation performed; this will probably take four to eight weeks and take us perhaps to the middle of April. Following which the earliest date for acquisition is likely to be the middle of June.”

“As I have said it will be four to eight weeks before the valuer completes his valuation and he then serves notice of the valuation on both the company and Chief Pleas, there is then a 28-day period when the valuation can be set aside by the Royal Court on the application of either party, if however, no application is made then the valuation becomes final. 56 days following service of the notice, a binding agreement is deemed to have been entered into, and the relevant day when the takeover is completed, and the compensation payable is seven days after that. So, we have got 63 days after all of this takes place, and it is because of the way that the legislation is drawn.”


Conseiller Raymond then asked that the Committee returned to the Law Officers to request changes that would allow seizure of the assets before the valuation was completed.

The draft legislation was sent to SEL on 5th November 2021, and they had 28 days to make representations to Policy & Finance; this window closed on 2nd December 2021. Policy & Finance will now be considering any representations that SEL may have made, before bringing the Projet that will facilitate a compulsory purchase to an Extraordinary meeting scheduled for 21st December 2021. If the propositions are passed at this meeting, the legislation will then be sent to the Privy Council for approval and the purchase rights will most probably will become law in February 2022.

On 18th November 2021 in an open letter to Conseiller Guille, SEL strongly contested the assertions that they had not been communicative, stating “this is resolutely denied by Sark Electricity Limited.” Mr Witney-Price’s correspondence can be viewed in full on SEL’s Facebook page. In response, on 24th November 2021, the Electricity Price Commissioner (EPC) also published an open letter, and this letter can be viewed on the Price Commissioner’s website epc.sark.gg.

Every year, SEL does a truly excellent job festooning The Avenue, the Island’s main commercial thoroughfare, with Christmas lights that see the Island punching way above its weight. At their own cost SEL are putting the lights up, amidst all of the current hostility, a decent and selfless gesture worthy of public recognition.


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