(1) Introduction

This statement is produced by Guernsey Electricity Limited ("GE") in its role as conveyance licensee in accordance with Licence Condition 31 of the licence issued to GE by the Office of Utility Regulation ("OUR").

This statement allows existing and new system users to understand the basis upon which charges for connection to the system and for use of system ("UoS") are made. In aggregate, these charges provide GE with a revenue to recover the allowable conveyance business costs, covering such matters as the planning, design, construction, operation, maintenance and replacement of the conveyance network.

The determination of connection and UoS charges is a cost allocation exercise, in that increasing the proportion of revenue collected via UoS charges would lead to a corresponding reduction in connection charges and vice versa. Typically, GE charges new users a fee for connection but major network developments are funded by UoS charges.

On behalf of the Board of Industry, the OUR reviewed the scope for competition in the electricity supply market in Guernsey and the Board of Industry's recommendations were presented to the States in January 2003. The States approved the proposals resulting in an exclusive licence for Guernsey Electricity to convey electricity in the island for a ten year period commencing 1st February 2002.

This statement is concerned only with the conveyance system, that is, the electricity distribution system operating at 11,000 volts and above (1). It is expected that system users, both generators and suppliers, will make connection at 11,000 volts since higher voltages are used only in very limited circumstances for bulk supply purposes. Users and potential users who wish to understand the extent and nature of the conveyance network are recommended to read the Statement of Opportunity which may be found on the GE website (www.electricity.gg) or purchased from GE.

vAny user requiring advice on the matters set out in this statement is recommended to contact Mr David Smart, Senior Operations Engineer, on 01481 200700, e-mail admin@electricity.gg.

1 To allow appropriate comparisons within GE's regulatory accounts, the 90,000 volt transmission system from Europe connected at Barker's Quarry is considered to be part of the generation business not the conveyance business.

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