Manx Gas and the gov are close to reaching a deal that would see customers receiving their long-awaited rebates.
An optimistic note was sounded by Manx Utilities chairman Rob Callister this week, saying a change in management at Manx Gas had seen positive talks, following a breakdown in negotiations over a loan reduction earlier this year.
The reduction was offered on the basis that it would ultimately free up money for Manx Gas to pay rebates to customers after calls for tariff cuts. But the rebate figure being talked about now is lower than mooted earlier this year, dropping from £70 to £63.
Mr Callister told the House of Keys: ‘It is hoped that an agreement can be reached with Manx Gas to allow Manx Gas customers to benefit in full from any loan reduction agreed by the Treasury.’
He said it was hoped funds from the loan reduction could be passed on to customers ‘as quickly as possible’.
As part of a proposed voluntary agreement between gov and Manx Gas, Treasury offered to reduce loan charges to Manx Utilities, in respect of the natural gas network extension, and it in turn would be able to reduce its charges to Manx Gas, to pave the way for rebates.
But talks broke down in February. Gov told Manx Gas it was dropping the voluntary agreement proposal but remained committed to securing the government’s part of a rebate to Manx Gas.
‘This reduction in loan charge was only agreed on condition that Manx Gas enters into a contractual agreement with Manx Utilities, which includes an obligation on Manx Gas to ensure that 100% of the savings will be passed on to Manx Gas customers,’ he said.
‘Negotiations on the reduction broke down in May this year due to a position adopted by Manx Gas.
‘However, following the change of management of Manx Gas, I am pleased to advise that a constructive meeting was recently held with Manx Gas and with officers from the Cabinet Office, Treasury and Manx Utilities.’
As yet, Manx Utilities has not adjusted any of its charges to Manx Gas because agreement has not been reached with the provider.
Mr Thomas said Manx Utilities was ‘sitting on nearly £1 million’ that could go to Manx Gas customers to cover the rebate for the two years concerned. He asked how that would be paid out. Earlier this year the expectation had been £70 for each customer.
‘Is that what Manx Gas customers can now expect given that this money is now held, it seems, by Manx Utilities?’
Mr Callister said Manx Utilities was holding about £700,000 per year on behalf of Manx Gas customers and was waiting for the agreement to be reached ‘to ensure that 100% of those refunds is given back to Manx Gas customers.
‘That is the key here. We do not want to see Manx Gas keeping £20,000 or £25,000 dealing with this refund – 100% has to go back to Manx Gas customers.’
He confirmed the overall amount of rebate was likely to be lower than forecast previously.
‘It is around £31 per Manx Gas customer per year refund. If we go back to January 2020 then at the moment approximately – and it is only approximately – Manx Gas customers can expect around £63 refund to their accounts.’