Met Service Price Increase.

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A decision made (07/08/2006) regarding Public Met Service price increases for 2007.

Subject:	Public Met Service price increases for 2007
Decision Reference:	MD-PE-2006-0098		Exempt clause(s):
Type of Report: (oral or written)	Written		Person Giving Report (if oral):
Telephone or e-mail Meeting?			Report File ref:
Written report – Title	Jersey Met - Price increase 2007
Written report – Author (name and job title)	Anthony R Pallot Principal Meteorological Office
Decision(s): The Minster approved the schedule of charges for meteorological services in 2007 as set out in the annex to the report
Reason(s) for decision: To maintain commercial income derived from public met. services in line with the increase of the Jersey Retail Price Index as measured in March 2006 of 2.4%
Action required: Principal Meteorological Officer to update details in relevant brochures, websites and directories
Signature: (Minister/ Assistant Minister)		Date of Decision: 7 August 2006

Met Service Price Increase.

PLANNING AND ENVIRONMENT

Jersey Met Price Increases for 2007

Public Item

Purpose of the Report

To maintain income derived from commercial public met services in line with the March 2006 increase in the Jersey Retail Price Index of 2.4%.

Background

The Meteorological Department provides a range of climatological and forecast services to business and the general public for which a charge is made. As a significant proportion of the revenue expenditure of the section is generated from this income it is important that the income level is maintained in line with increases in the Jersey RPI if increases in salary and other associated operational expenditure are not to disproportionately impinge upon the revenue cash limit imposed by Treasury and Resources.

Discussion

The attached table presents the current, proposed and percentage increase for each of the services provided by Jersey Met. Increases have largely been held as close to 2.4% as is practicably possible allowing for rounding to the nearest 10p. However, there are several items where increases have not been applied over a number of years due to either technical reasons (e.g. premium rate telephone charges) or unfavourable market conditions where an increase had been seen as detrimental to the net return. In these cases increases are now proposed to bring prices in to line with their real present day values and / or to more adequately represent the costs of providing those services.

In particular:-

Premium rate telephone services have been held at 50p / minute since January 2000 due to the non-availability of an appropriate higher charge band. A 60p / minute charge band is now available and it is proposed to raise the charge of these services with effect from 1st Jan 2007 in time for publication in the 2007 Telephone Directory. Of the 60p charge, 20p goes to Jersey Telecom for providing the infrastructure and 40p to Jersey Met as the service provider. This represents a 20% (compound rise in the RPIx over the same period 2000 to 2006 is 28.7%) to the customer, the actual increase in revenue (assuming similar call volumes) to Jersey Met will be 33% resulting from an increased proportion of the share from Jersey Telecom. This will also bring the two telephone services (Jersey Weather and Channel Islands’ Shipping Forecast) in to line with the recently introduced 6 Day Weather Outlook. The forecaster consultancy service will remain at £1.50 per minute due to the non-availability of a higher charge band.

Weather to GO! services. These are credit card services through which customers can either receive a personal forecaster consultation or printed forecasts via fax or e-mail. Significant charges are imposed by HSBC regardless of the number of transactions incurred, in order to make the service financially viable it is proposed to raise prices year on year by a flat rate of 25p. For 2007 this represents a 4.5% increase on forecaster consultation and a 7.1% increase on faxed or e-mailed products. Similar services provided by the United Kingdom Meteorological Office are charged at £17.50 per call or £1.00 per minute to receive a fax with a typical call duration of 4 minutes.

Daily Faxed and e-mailed products by subscription, following a review of delivery costs it is proposed to bring the price of products faxed to Guernsey and the UK into line with those faxed locally. It is estimated the cost of each fax call amounts to some £30 per year in call and line rental charges. In an effort to reduce these costs it proposed to offer a £2.50 per quarter discount on quarterly and annual subscription rates to customers receiving their products via e-mail.

Service Level Agreements – following a review of the proposed 2007 revenue budget it is proposed to keep charges for these agreements at 2006 rates. This is to ensure that the 3 principal customers of these services benefit from the overall savings being achieved through staff reductions.

Recommendation

The Minister to approve the schedule of charges as set out in the annex to this report.

Written by:	Anthony R Pallot

Approved by:	Chris Newton – Environment

Attachments:

Table 1 – Jersey Met. Price increases with effect from 1st January 2007.

Decision Summary reference: MD-PE-2006-0098

26 July 2006