Manx Gas Wanted Much Bigger Increase

While islanders are facing a mountainous gas price hike this winter, MHKs have revealed that it could’ve been much worse.

Tynwald yesterday backed the recommendation of the Communications and Utilities Regulatory Authority to increase the price cap by 2.1 pence per unit of gas (27.5%). This, Manx Gas says, allows it to break even on the gas it is selling on island.

During the Tynwald debate Onchan MHK Rob Callister described voting for the increase as a ‘leap of faith’ but one he said he would take after Treasury Minister David Ashford outlined the support that would be available for the lowest income households.

However, Mr Callister also outlined that Manx Gas wanted an increase almost three times the one it has been granted. He said: ‘We have all seen the headlines since the start of the year about the wholesale price of natural gas and I fully acknowledge that the Isle of man will not be immune from those escalating costs in the weeks and months to follow. However, with no financial information or financial statement made available to members before this sitting, we are therefore having to take this motion on trust and the fact that 2.1p increase per kWh (kilowatt hour) proposed by the regulator is a genuine breakeven figure for Manx Gas over the next financial year.

Rob Callister

‘That said, it is disappointing to hear that Manx Gas were originally looking for a 6p per kWh increase, especially when we know that so many businesses and island residents are struggling financially at the moment. Mr President, there is no place for greed or profit during a financial crisis which is what Mr Thomas (who moved the motion) has already outlined this morning especially on a small island and especially with a population of around 84,000. Neither should we ignore the fact that Manx Gas has enjoyed a 9.99% return on capital over the past five years, along with a target rolling average of around 10.6% return on capital prior to 2015. Manx Gas have certainly enjoyed an excellent rate of return from the people of this island over the last 10 years and I know that many of my own constituents are still looking for that refund that was promised during the last administration and they’re still looking for lower bills and I hope that at some point in the future we can fulfil those promises.’

Taking to social media, MHKs Dr Michelle Haywood and Tim Glover both confirmed that they had not wanted to support the increase but realised the difficult situation members found themselves in.

Dr Haywood added: ‘Tynwald resolved some time ago to pass Regulation of Manx Gas prices to CURA (the Communications and Utilities Regulatory Authority) but the full transfer of regulation hasn’t been completed. However, CURA were able to examine the request from Manx Gas for an increase in the tariff and brief members last week.

Dr Michelle Haywood

‘To be honest we had very little option other than to vote to for the increase. Refusing Manx Gas the option to increase the tariff would have meant undermining CURA (who had done such a good job in refusing to even ask for the 6p increase that Manx Gas wanted initially) and potentially risked gas supplies in the future. It’s hard though as we are all aware that Manx Gas took excessive profits from their Manx customers (over 22,000 homes) over the years. And there was a high level of concern for those customers for whom this increase will be unaffordable.’

However she said that members had been reassured by promises of support for the lowest income households by Treasury Minister David Ashford.

Arbory, Castletown and Malew MHK Tim Glover also posted on social media about the increase and said: ‘ The regulator brought this to Tynwald for approval with world gas prices souring to unprecedented levels due to a lack of storage facilities in UK and Europe and world politics at play.

Tim Glover

‘The island is not immune from this position.The regulator imposed the minimum rise – Manx Gas wanted more.To my mind the one thing we couldn’t do was vote no as this could have increased costs and put pressure on the security of supplies. I was pleased Chief Minister Alfred Cannan came out fighting saying any threat to our supplies will be treated with every measure available.’

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