A last-minute deal has been struck to maintain power supplies on the island of Sark after its electricity supplier threatened to pull the plug in a pricing dispute.
Lawyers for the island’s government thrashed out an agreement with Sark Electricity to enter into negotiations to buy the utility firm.
Sark Electricity had been threatening to switch off supplies to 300 households on the island by the end of the month after being forced to lower prices.
Sark is self-governed but has close ties with its larger neighbour Guernsey, which legislates on some matters. The billionaire owners of the Daily Telegraph, Sir Frederick and Sir David Barclay, own businesses on Sark and a castle on the neighbouring Brecqhou island.
Seigneur Major Christopher Beaumont, Sark’s head of state, acknowledged that the threat of a blackout had been a worry for residents. “It has demonstrated what we already knew so well, the community spirit is very strong,” he said.
Beaumont said the government had “agreed to a valuation process … with a view to buying at some date in the future”. Asked whether it was highly likely the government would buy the company, he said: “Yes, that seems to be the most sensible way forward.”
He said he did not know how much it would cost to buy it, adding: “That’s why we’ve got valuers.”
The dispute was triggered when an independent commissioner ordered Sark Electricity to lower its tariff to 52p/kWh after ruling that residents of the island were paying too much. Islanders had been paying 66p/kWh, which was deemed “neither fair nor reasonable”.
The family-run company said it would lose £20,000 a month at the new rate and would have to pull to plug at the end of November.
David Gordon-Brown, a director of Sark Electricity, told the Guardian it had been a “great relief” to strike the deal at 1am on Friday to enter into negotiations for a buyout. “I’m glad we’ve got a resolution for the benefit of the people of Sark,” he said.
Asked about claims people on the island had been paying over the odds for electricity, he said: “We only charge what it costs to make it. It costs an awful lot to make it and nobody wants to pay it. But this is life.”
