THE rising price of crude oil will not affect the cost of electricity just yet. But Steve Morris, Guernsey Electricity’s electricity engineering director, said a rise locally was likely.
He said that in the wake of the price of oil reaching $100 a barrel, all energy prices would be likely to increase.
Npower was the first UK-based company to announce yesterday that its prices would have to go up by 12.7% to combat the escalating cost of crude.
‘The price of electricity will not rise immediately,’ said Mr Morris.
‘We have a four-year price control agreed with the Office of Utility Regulation which started last year. That allows us to pass through the raw material price variations at a time agreed with the OUR.’
A large proportion, approximately 65% in 2007, of Guernsey’s electricity is imported from France and comes from a nuclear power station.
The rest is generated locally at GE’s oil-fired power station, but Mr Morris said the price of all energy, no matter what the source, was affected by the cost of crude.
‘We buy electricity from France and the price is negotiated with the French and it varies between different times of the year and times of the day,’ he said.
‘All the sources on the European grid, of which there are many, are influenced by the price of crude oil.’
He said he would not be able to tell customers exactly when electricity was likely to cost more.
‘I don’t think it would be appropriate for me to put a time on it because ultimately it’s a decision made by the OUR,’ he said.
The company put up prices in April and Mr Morris said the current rate of the global increase in costs would make islanders uneasy.
‘It’s fair to say that the price of oil affects everything we do in the island and it’s an issue for concern,’ he said.
‘If it stays at $100 a barrel for any length of time, then the cost of all goods and services will rise.’
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