Get ready for your electricity bills to go up next month
Serious electricity price increases look set to be introduced from the start of next month.
In the House of Keys yesterday (Tuesday), Manx Utilities Authority chairman Rob Callister gave customers a shock when he said that, while a price increase had yet to be confirmed as talks continued with Comin, the options on the table ranged from a 5% inflationary increase to a massive 39% on unit prices.
He also revealed that in the current financial year, upwards of £16 million had been spent just keeping prices on the level, which equated to about £180 per household or business.
‘It is absolutely right that we did support businesses and individuals as we went through the winter period,’ said Mr Callister, but he said it had created extra pressures.
‘This is a national crisis at the moment. An energy crisis that is not just happening here in the Isle of Man. It is also happening in the UK and in Europe.
‘We are in communications with the Council of Ministers, with Treasury, to try and navigate our way around to make the right decision for our island and for people who we already acknowledge are struggling over the winter period because of higher inflation costs, food costs and energy costs from other providers.’
Under an arrangement agreed by Tynwald, in 2018, electricity price increases are linked to the consumer price index (CPI) rate published in September each year and was 5% in 2021.
But Mr Callister said: ‘In addition, a further fuel cost increase is being considered for electricity unit rate only, in order to address the ongoing impact of the global energy crisis, which is exposing energy suppliers, including Manx Utilities, to exceptionally high wholesale natural gas prices.
‘The fuel cost increase required on top of the 5% CPI is currently being assessed, following the board’s recommendation to provide a number of options for consideration by the Council of Ministers.
‘This is despite our prudent hedging of 70% of our fuel requirements for the current financial year and the forward purchasing of just over 50% of our expected gas purchases for electricity generation for 2022/2023 at an average cost of 47p per therm.’
He said: ‘Originally we would have announced our tariffs by now but we are very aware of the impact of rising bills is having on individuals and businesses and it is important that we try to do all we can to minimise the level of increase.
‘As such I am not in a position to advise what the final percentage increase will be at this time but I can advise it currently spans between 5% and up to and towards 39%.’
He said the MUA was seeing forward pricing for natural gas for the upcoming summer and winter of above 200p per therm, almost four times the average price.
Mr Callister was responding to a question tabled by Arbory, Castletown and Malew MHK Jason Moorhouse, seeking details of any price rise.
In a follow-up question, he asked the MUA chairman what had been spent so far to keep the bills at their current level and if it was possible to keep that going.
Mr Callister said: ‘At the moment, Manx Utilities have absorbed from its reserves around £16 million. That has come from funds within the organisation.
‘As we enter into a new financial year that is just not sustainable. For that reason we have to look at setting increased tariffs from April 1, 2022.’
Douglas Central MHK Chris Thomas asked for a more detailed breakdown of where the £16 million used to keep a hold on prices had come from.
‘It could well be that water ratepayers, sewerage ratepayers, telecoms users and gas users have been paying to subsidise electricity generation and distribution by the Manx Utilities Authority and we need to have clarity about that,’ he said.
He added he had tabled a written version of that question to ‘help’ Mr Callister, who reiterated the money came from reserves.
Mr Callister later took to social media to say the 39% referred to was effectively a ‘break-even’ figure, based on an average price of about 163p per therm.
