The cost of electricity in Sark is unfair and unreasonable, according to an investigation.

The findings, by the Electricity Price Control Commissioner, suggest Sark Electricity would enjoy a reasonable return charging 53p per unit.

Islanders had been paying 66p per unit - the highest known electricity price in the world - but Sark Electricity Limited will raise the price to 85p per unit from today.

Sark Electricity Limited has an unrealistic view of the level of returns it is fair to expect customers to bear and it also assumes that all costs it incurs operating the business, whether they are reasonable or not, may be passed on to customers. This may be "neither fair nor reasonable".

Dr Anthony White, Sark's Electricity Price Control Commissioner

Sark's electricity provider says legal costs incurred in negotiating with the island's electricity regulator has led to major losses.

It says the only way to recoup them is in hiking charges.

A statement from Sark Electricity criticised the government, saying their policy on electricity had led to the increase.

As the smallest Electricity company in the world, it is not surprising that our costs are high, but the decision of our government to make the electricity price even worse by driving up those costs is incomprehensible.

Sark Electricity statement

The investigation into SEL's business and operations included the use of WSP, an internationally recognised engineering company, to assess the company's network and power generators on Sark.

The Commissioner's analysis took into account the cost of replacing the whole system, its age, the fixed and variable costs, and calculated a "fair and reasonable" return for SEL's shareholders.

The Electricity Commissioner will now seek representations from SEL, residents and other interested parties. He will then decide whether there is a need to make a formal determination.

The Chief Pleas worries that previous threats by the company to shut off the island's power could be followed through.

The Chief Pleas worries that previous threats to shut off the island's power could be followed through. Credit: ITV Channel TV

Sam Bateman, Sark's Head of Policy and Finance, says that could have potentially grave consequences.

We need it for keeping food good, medicines. We need it for pumping water because there's no mains. Without electricity potentially within 6 to 8 hours there's loss of life on Sark. So we'll work as hard as we can to keep the power on, but we can't be held to ransom. And we've actually upped our contingency plan, if he does shut off then our next stage of how to get emergency power to the island.

Sam Bateman, Chief Pleas' Head of Policy and Finance

Katie Hamon owns a shop on the island. She says that a price of 85p per unit of electricity will hit islanders hard.

Katie Hamon says islanders will think twice about using appliances that they are reliant on. Credit: ITV Channel TV

Most people that I know who live in Guernsey or live in the UK pay less than 20p per unit, so if you imagine what that would do to all your bills, it's devastating. We live on an island so we're reliant on electricity for running things like freezers. Now we'll be thinking twice about anything we use.

Katie Hamon, shop owner