Plan to freeze water rates in Manx Utilities' debt review

Manx Utilities is a statutory board of the Isle of Man Government

Home and business owners in the Isle of Man could see water and sewerage rates frozen for 2018-2019 following a review of Manx Utilities £538m debt.

National Economic Research Associates (NERA) recommended the debt be restructured to "reduce the potential burden of charges on customers".

It said the historic debt should be reduced in exchange for lower price increases over the next 5-10 years.

The Treasury, however, is proposing freezing charges for 12 months.

Manx Utilities Authority (MUA) was formed when the Manx Electricity Authority merged with the Water and Sewerage Authority in 2014.

It carries historical debt of £260m in bonds and £278m in Treasury loans.

The construction of Pulrose Power Station was funded with £185m of commercial bonds

Treasury Minister Alf Cannan will ask Tynwald members to back the plan to reduce the amount Manx Utilities owes his department by £95m - reducing government funds for capital schemes.

Mr Cannan said it would "shield consumers and improve business confidence".

A government spokesman said the debt had arisen over time in order to fund significant infrastructure investments including the construction of Pulrose Power Station.

The NERA review concluded Manx Utilities has a "higher level of debt than comparative utility suppliers."

It said MUA water charges are higher than comparative utility suppliers; electricity charges are marginally higher and sewerage charges are lower than comparators.

Household water and sewerage charges rose in April by an average of £34 per household for each of its 49,000 customers.

If the motion is approved, Manx Utilities will return with a new long-term pricing strategy within 12 months.