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GUERNSEY Electricity managing director Ian Watson said rising global energy prices in recent years had made an increase in local tariffs inevitable.

However this was still going to be well below the rises seen elsewhere.

Guernsey Electricity had not yet had time to fully assess what impact the OUR’s price control decision would have. The company only received the report at 10am today, and expects to make a full assessment once it has had time to review the detail.

Mr Watson said the company’s priority was to safeguard customers. This meant keeping prices as low as possible but at the same time ensuring adequate funding is available for essential future investment.

‘It is important that we strike the right balance between the need for Guernsey Electricity to protect customers from increasing tariffs, and the requirements of a secure and reliable electricity supply going forward, because that is absolutely essential to the future well-being of the island,’ he said.

Although bills have risen sharply elsewhere, to date Guernsey Electricity has absorbed most of the additional costs incurred due to rising global energy prices. This has protected customers, but has also resulted in operating losses for the company.

‘By comparison to most countries we have only seen very modest rises here, and that is something we are very proud of. However it is only been possible because we have absorbed the additional costs that we have incurred, but clearly that position is not sustainable in the long-term,’ he said.

In the UK prices have risen several times since the start of 2003, and most households are now paying 60% more for their electricity. Locally, tariffs rose in January 2006 for the first time in 15 years, and are now just 10% higher than before the increase.

Although some UK providers have announced they will shortly be reducing tariffs, Mr Watson said an upward adjustment was still required locally to offset the increased cost of oil and importing electricity which the company has so far absorbed.

‘We have worked very hard with the regulator to address a number of fundamental issues that were raised previously, and we hope that this progress is reflected in this price control.’