THE Infrastructure Minister is considering reviewing whether Islanders are paying a fair price for gas after a sharp increase introduced by Island Energy earlier this year.
Under the law, the States has the power to step in and regulate prices if Members deem that necessary.
Constable Andy Jehan said that as part of his ongoing review of the Jersey Gas Company (Jersey) Law 1989, he was considering whether a review was now needed.
Meanwhile, the JEP understands that more than 400 Island Energy customers are now being represented by a legal firm after lawyers concluded that the “insulting” compensation payment of £11.56 following an Island-wide gas outage presented a “clear breach of contract”.
Jersey Consumer Council chair Carl Walker added that it would be a “wasted opportunity” not to use the ability to regulate prices allowed by the law when “people are looking for help and action during this cost-of-living crisis from their elected representatives”.
In January, Island Energy announced an above-inflation increase in prices of 12%, roughly £13.80 per month.
The company previously said the rise was necessary due to market volatility, high interest rates and inflation – it also pledged to review prices in six months.
Around 4,000 customers were left without gas for up to two weeks in October when a technical fault caused the supply to shut off.
In his written response to Deputy Hilary Jeune, the Infrastructure Minister said that he would “meet with Island Energy once I have had the opportunity to address this part of my new portfolio”, as well as discussing it with Environment Minister Steve Luce and Economic Development Minister Kirsten Morel – who holds responsibility for the Competition Law.
He explained that the Jersey Gas Company (Jersey) Law 1989 provided a power to introduce price regulation.
While a previous States Assembly considered using this function in 2016, it was concluded that prices were “within a reasonable range” and regulation was not needed at the time, he said.
Mr Jehan added that it did not reflect “any assessment of the latest price increase”.
He said: “My intention is therefore to discuss the issue with the Economic Development Minister 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.”
He added that he did not intend to establish a government-funded compensation scheme with regard to the Island-wide outage, adding: “However, I do intend to challenge Island Energy on its approach to compensating consumers.”
Mr Walker said: “There still remains big questions about why IE applied an 8% price increase in Guernsey and a 12% increase in Jersey.
“The gas provider blamed the government and the costs of landing the gas here from the boat for the extra increase being applied in Jersey, so perhaps the government could use the gas law to firstly investigate whether that is indeed the case, and not simply IE recouping the measly compensation it’s offered to Islanders for October’s outage.
“People continue to struggle on a daily basis and it seems a bit of a wasted opportunity to leave a law which gives the States the ability to dig down into the pricing of an important energy supplier sitting on a shelf gathering dust.
“People are looking for help and action during this cost-of-living crisis from their elected representatives and I’m not sure there’s been a more important time to do that.”
At the time of the increase, the provider said: “We have kept our tariffs the same for over a year. However, with inflationary pressures on operating and importation costs, high interest rates impacting on our capital investment programme and the continued volatility in the wholesale gas market means we have had to take the difficult decision to make this increase.”
Island Energy was approached for comment.
