Two suppliers who’ve got enough energy to argue

Saturday 7th November 2009, 3:00PM GMT.

I HAVE been watching with interest the arguments boiling up between the Island’s gas and electricity suppliers.

Jersey Gas are claiming that the energy supplied through Jersey Electricity is a more expensive fuel and that its carbon footprint is ten times that claimed by the JEC.

At the same time, the Planning department are proposing new by-laws that will favour electricity over other sources of fuel.

In truth, Jersey’s fuel use has for some years been biased towards electricity imported from Electricité de France. The JEC’s building services division has, in recent years, been gaining competitive ground by winning bids to install electric heating in many of the Island’s new building developments. This has been a source of company pride and lauded in annual reports.

Oil-powered heating is relatively widely used in Jersey, but only by those who have the means to install a storage tank on their premises. Gas, on the other hand, is not so readily available – where I live, for instance, there has never been any gas connection.

While I would not dare to suggest bias on behalf of the States, it is a fact that the States do own around 62% of the total shareholding of Jersey Electricity. During the recent couple of years the JEC share price has done rather well, currently hovering around £70 per share. The dividend, which goes straight into States coffers last year totalled £1.4 million and is likely to go up again this year. Add to that the income from Social Security, GST and the like and the total revenue coming from the JEC into States hands is not far off the £4 million mark.

Jersey Gas, on the other hand, used to belong to Channel Island-based firm International Energy Group, but was sold off in 2006 to an Australian private equity group and is now controlled by Australian firm Babcock and Brown.

It is not unreasonable to assume, therefore, that there would be an added financial attraction for the States if more building developments in the Island favoured electricity, rather than gas.

As for the carbon footprint argument, it rather depends on whether you feel totally comfortable with nuclear energy and the way that it is produced. Environmentalists such as Greenpeace have long argued that nuclear power and the waste it produces is far from innocuous.

Even now, the longer-term repercussions are not without detractors. But there is no doubt that in comparison with the carbon footprint produced by the traditional electricity generators at La Collette it looks attractive and complies with international carbon standards.

Cost, meanwhile, is still in the balance. The JEC has imposed some hefty price rises in the last couple of years and it is clear that the Channel Islands are, in effect, sitting ducks when it comes to price rises imposed by European electricity producers.

It would therefore seem more than advisable for the Island to balance its energy suppliers, not least so that consumers have a fair choice. But at the moment the JEC have gained a competitive edge which the States is doing nothing to counteract – and which is ultimately in the financial interests of both to pursue.

• Read more of Christine Herbert’s comment in today’s Jersey Evening Post

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