The States of Guernsey said it would give Alderney Electricity (AEL) £200,000 to offset bills on the island.
Electricity bills in Alderney will be subsidised for the rest of the year if the cost of a barrel of crude oil exceeds $100. The current price of crude oil is $99.76, according to the Financial Times, external.
The States of Guernsey said it would give Alderney Electricity (AEL) £200,000 to offset bills on the island, which has a population of 2,167.
Its Policy and Finance Committee approved the temporary subsidy to help mitigate the impact of short-term increases in global prices on island electricity consumers.
Jeannie Cameron, who chairs the committee, said the funds would be applied directly to customers' bills.
“The recent rise in global oil prices has the potential to place additional financial pressure on households and businesses at a time when many are already managing increased costs.
This temporary measure provides a level of protection against exceptional fuel price increases while ensuring that public funds are only used where they are genuinely needed.”
Cameron said unlike its sister islands Guernsey and Jersey, Alderney did not have cable supplying electricity from France.
“Diesel fuel is required to generate it. The committee recognises that this temporary subsidy complements, rather than replaces, AEL's continuing work to secure the most competitive wholesale fuel procurement arrangements available.”
How will the subsidy work?
The subsidy will be applied directly to customers' bills, according to Jeannie Cameron, and is intended to offset electricity costs for the rest of the year if crude oil rises above $100 a barrel.
Why is Alderney different from Guernsey and Jersey?
Alderney does not have a cable supplying electricity from France, unlike its sister islands Guernsey and Jersey, so diesel fuel is required to generate electricity on the island.
What has the committee said?
The Policy and Finance Committee said the temporary subsidy is designed to help mitigate short-term increases in global prices for island electricity consumers and to ensure public funds are used only where they are genuinely needed.
Cameron said the recent rise in global oil prices could put additional financial pressure on households and businesses already facing increased costs. She also said the subsidy complements, rather than replaces, AEL's ongoing work to secure the most competitive wholesale fuel procurement arrangements available.
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