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CURA Begins Biannual Gas Review
CURA must review prices at least twice a year.
Gas prices could be set to drop in the coming weeks as the Communications and Utilities Regulatory Authority launches its biannual review.
Under regs set done by Tynwald, CURA must review prices at least twice a year, though it has already dropped tariffs once this year after wholesale prices fell.
To reach a decision, CURA said it has ‘requested the information it requires to perform the review from Isle of Man Energy and will make a determination as soon as possible after it is received’.
Under the regs, it said that the overall return earned by Isle of Man Energy is ‘restricted and that any over or under-recovery is reflected when calculating tariffs in subsequent periods’.
CURA added: The key aim of this review is therefore to reduce any likely over or under-recovery so that subsequent period adjustments are kept to a minimum. The Authority has consistently advocated for tariff stability being in the interest of all stakeholders.
‘The review will concentrate on the impact of commodity prices on the tariff; it should be kept in mind that while commodity markets have seen prices reduce to levels close to traditional norms, the Authority also takes into account forward purchases. Hedged positions reflect the commodity prices when they were purchased, not the current market rates.’
Prices
Earlier this year, given the drop in wholesale gas prices, CURA ruled that a 16% drop in gas tariffs should be made, which came into effect on March 1.
The island’s taxpayer owned Manx Utilities recently announced that its planned increase for July would be lower than previously announced.
That increase, which was scheduled to be 6p per unit, was cut to 2p per unit.
However, if CURA does tell Isle of Man Energy to cut tariffs, it will only raise further questions for Manx Utilities and its chairman Tim Crookall MHK about whether it should again reconsider the increase in place for July 1 given that the majority of electricity produced by Pulrose Power Station is generated by natural gas.
Wholesale gas prices have fallen significantly across the last three months. On March 1 the BBC reported that prices were at just below 120p per therm, whereas on May 31, this had fallen to just above 63p.
Future
The Manx gov has said it plans to generate 75% of the island’s electricity from renewable sources by 2026 and to decarbonise the electricity supply using solar and wind power by 2030.
We still have not been told how much the projected cost of this will be to taxpayers.
