At next Wednesday’s Chief Pleas, the GP&A Committee are proposing to introduce regulation of electricity production. The Committee see it as their duty to ensure that Sark Electricity isn’t making “excess” profits “at the expense of the Community”.
The Sarkee Times believes these proposals to be misguided.
Malcolm Robson brought electricity to Sark in 1948. In the face of considerable opposition, he successfully brought a great public service to the Island with his own money. The service provided by Sark Electricity is outstanding. Our power supply is reliable and stable, we hardly ever experience power failures. Some other, much larger islands, cannot boast such a service. Customer service is courteous, professional and responsive. If you’ve ever had to call a customer service line of a UK utility, and had to spend 15 minutes answering security questions, being told there was no record on their system of what you were talking about, that none of their representatives could ever have said to you what the other guy told you just 5 minutes earlier, before your telephone call got disconnected and you had to go through the whole procedure of answering security questions and explaining what your call was all about all over again, you’ll know what we mean.
It is true that our electricity is expensive. But this is inevitable. Sark is a small, remote Island. All equipment and fuel has to be brought in on the government-owned monopoly, IoSS, not known for either efficiency or low prices. It almost certainly costs more for the diesel which powers Sark Electricity generators to travel the last 9 miles between Guernsey and Sark than it costs for it to travel from the bottom of the oil well in Saudi Arabia to Guernsey. We do not benefit from any economies of scale and fixed overheads are proportionally greater. It’s difficult (and expensive) to provide quality, reliable electricity supply on a small scale. All equipment requires redundant backup, in much greater proportion than it would on a large scale. Power generation using the cheapest known technologies is unavailable to us; we are pretty much stuck with a diesel generator. Diesel is an oil derivative, and oil has been rising in price, world-wide, and will continue to do so.
It is also true that Sark Electricity a monopoly. So are Avenue Computers (computer supplies), the Sark Post Office (postal services), Cable & Wireless (fixed line telephony and the Internet), the Gallery Stores (hardware store), Ross Henry (gas), Gavin Nicolle (oil), SG Law (lawyer), not to mention the Seneschal (notarial service), the Sark School (school), the Sark Fire & Rescue Service (firefighting), the Sark doctor (medical services), etc. etc. And so will be every provider of a service new to the Island in the future — services which we may deem useful.
Because all these providers are monopolies, it doesn’t mean they are all bad. Gavin Nicolle’s oil, Ross Henry’s gas, Cable & Wireless telephony all cost more than corresponding services do in the UK. That doesn’t mean we should regulate them all, take them over or shut them down.
In a small community like Sark, many providers will naturally be monopolies. Indeed, the GP&A and the Chief Pleas seem to accept this, for apparently two of our other monopolies — both happen to be government-owned — the IoSS and our doctor — are “lifeline” services which deserve our “protection” from the “threat” of competition, because apparently there isn’t room enough for more than one operator to survive, and must be subsidized by the taxpayer (i.e. all of us). Sark Electricity, on the other hand, is a “monopoly” which must be “regulated”.
Could it be that this is because Sark Electricity is a private company and that the GP&A’s concern is less for the community and more for grabbing more power for the government?
A monopoly generally is only ripe for regulation by anti-trust authorities if it is abusing its dominant market position to protect its monopoly and stifle competition. Such monopolies generally provide a poor service, don’t care about their customers and prevent competitors from entering their markets. Sark Electricity are not guilty of any of that. Readers may ask themselves, though, if IoSS are.
Readers can make their own mind up who, between Sark Electricity and IoSS, is charging excessive prices at the expense of the Community.
If the GP&A want to bring the cost of Sark electricity down, the best thing to do is to reduce the cost of delivering diesel, which powers Sark Electricity generators, to Sark. They can do this by de-regulating the market for cargo services to Sark, abolishing the IoSS monopoly and permitting competition in this market.
The Sarkee Times believes the GP&A’s legislative proposal is aimed at picking on an individual. This continues an unpleasant trend. The Sarkee Times will refrain from mentioning names like Barclay and Delaney in this context, but we will mention Andy Leaman and Simon Couldridge, and now David Gordon-Brown and Sark Electricity. Who is the next target of the “do not rock the boat or we will pass a law to pick just on you” brigade?
More in the latest print issue of The Sarkee Times.