Jersey and Guernsey Electricity have signed a new four year deal with French energy supplier EDF.
It will take effect in January 2028, when the current arrangement ends.
It secures ongoing access to low-carbon electricity from France.
The islands get the majority of their power via undersea cables from the continent, with local back up generation.
We're told the new agreement allows both companies more flexibility to manage costs to ensure prices passed on to customers are 'competitive and stable'.
Jersey Electricity Chief Executive Chris Ambler said:
“This is good news for Jersey and gives us long-term confidence in the security of the Island’s electricity supply.
"We have enjoyed a strong relationship with EDF over many years, and this agreement provides continuity beyond 2027 while also giving us greater flexibility in how we manage our future energy requirements.
“One of our priorities throughout the negotiations has been to ensure that we retain the ability to manage electricity purchasing carefully and responsibly.
"Energy markets will inevitably move over time but having a supply framework and the flexibility to manage when and how we purchase electricity puts us in a strong position."
Electricity demand is expected to increase as more homes move away from fossil fuel heating, and electric car ownership increases.
Alan Bates, Chief Executive Officer at Guernsey Electricity, said;
"Importing low-carbon electricity enables us to lower Guernsey’s carbon emissions and reduce our use of the fossil-fuel Vale Power Station.
"We can also import low-carbon electricity at a price generally lower than that of generating on-island, which helps to manage the impact of electricity prices on islanders.
"When we purchase electricity from Europe, we use forward price hedging arrangements to help mitigate against any price volatility in wholesale energy markets and to ultimately smooth out the immediate impact on electricity tariffs locally.
"The new contract allows the continuation of such forward hedging."
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