Manx Gas Responds

The boss of Manx Gas’ parent company Jo Cox says the new regulatory framework agreed by Tynwald last month will resolve a lot of the issues that led to it asking the gov for assistance.

As first revealed by Gef, Manx Gas sought talks with the gov earlier this year after it cancelled a due payment to Manx Utilities on Christmas Eve. The company also owed £9m to Manx Utilities earlier this month, though this has now decreased significantly.

In a statement, Island Energy Group Chief Executive Jo Cox said the company had been ‘quite open about the difficulties facing our business during the last six months and the fact that we engaged in multiple discussions with the government to try to navigate our way through this period’.

While talks between the two were confirmed, Ms Cox told a Tynwald committee that these talks were held in private and we still don’t know exactly what was discussed between Manx Gas and the Treasury.

Ms Cox said: ‘With gas prices increasingly rapidly, and our business operating at a loss, we had to request more than one price increase over the course of the winter. Not all were agreed, and so the aim of our engagement with Government was to investigate alternatives.

‘We made several proposals: firstly hedging our gas purchases, which was not put in place despite providing all management accounts to Manx Utilities, which would normally have been sufficient to reassure a wholesale supplier that Manx Gas was not a credit risk.  We also asked if our payment terms could be changed from 30 to 90 days to aid our cashflow, but this was not approved by Manx Utilities.’

She added that the company later suggested to the gov that it could ‘consider supporting customers with subsidies for their Q1 gas bills’, but this was rejected by the Treasury.

The Framework

Regarding the new framework, which sees Manx Gas guaranteed a level of return, Ms Cox said this allows prices to increase to ‘match the wholesale market value, resolving a lot of the issues we had been discussing with our colleagues in Government’.

Ms Cox added: ‘This framework gives everyone a very clear process to follow in future where prices can go up or down in direct relation to movements in the market. We expect the current market volatility may continue in the longer term, so having this framework in place is vital as prices can now follow the market in a timely manner, giving transparent pricing for all parties.

‘Government support for consumers would still be an option if the situation warranted it, and we remain in active discussions to ensure everyone is working together in the best interests of our customers during these unprecedented times.’