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WQ.76/2024
WRITTEN QUESTION TO THE MINISTER FOR INFRASTRUCTURE BY DEPUTY H.L. JEUNE OF ST. JOHN, ST. LAWRENCE AND TRINITY QUESTION SUBMITTED ON MONDAY 11th MARCH 2024
ANSWER TO BE TABLED ON MONDAY 18th MARCH 2024
Question
“Further to his response to Oral Question 23/2024 on 6th February 2024, will the Minister advise –
- whether he has met Island Energy and, if so, what actions were taken from the meeting;
- whether he will review the Jersey Gas Company (Jersey) Law 1989 and, if so, what changes, if any, he intends to propose in light of the impact of Island Energy’s recent 12% price increase; and
- whether he is considering establishing a compensation scheme for gas customers affected by the October 2023 outage?”
Answer
- It remains my intention to meet with Island Energy once I have had the opportunity to address this part of my new portfolio. At a minimum, I intend to discuss the matter with the Minister for the Environment who is responsible for co-ordinating the island’s energy policy, and the Minister for Sustainable Economic Development who holds responsibility for the Competition Law. These discussions are now underway, and my intention is to ensure we take an aligned approach with Island Energy.
It is my hope that I will have the opportunity to speak to the company in the very near future.
- I am undertaking a review of the Jersey Gas Company (Jersey) Law 1989. As the Deputy is aware, it provides a power to introduce price regulation. This issue has been considered by a previous Assembly, with a report in 2016 carried out by Oxera to look at the reasonableness of gas prices. It was concluded then that prices were within a reasonable range and as such did not appear to be higher than they would have been had regulation been in place. Accordingly, it was determined that regulating gas prices could not be justified at that point in time.
Of course that decision and Oxera’s report was based on an analysis of historical data and it does not reflect any assessment of the latest price increase. My intention is therefore to discuss the issue with the Minster for Sustainable Economic Development and to consider whether an update of that previous report should be obtained, notably as matters have also changed with regard to the profitability of the company and its declining market share.
I am keen to be assured that any price increase is introduced on a fair basis and that the energy market as a whole is acting in the best interests of islanders.
c) I do not intend to establish a Government-funded compensation scheme.
Following enquiries, I understand Island Energy is engaging directly with commercial customers who suffered a financial loss. With respect to domestic consumers, I have not been made aware of any that suffered significant hardship; had that been the case, I understand that there were measures available to assist people.
However, I do intend to challenge Island Energy on its approach to compensating consumers, and it is a matter I intend to raise in discussion with the Minister for the Environment.