Regulator reveals plan to link Manx Gas tariffs to wholesale costs

Proposals by the island's energy regulator would see Manx Gas profits capped

Future gas tariffs on the Isle of Man will be pegged to the fuel's wholesale cost, if Tynwald approves the move.

The island's energy regulator has set out plans to cap Manx Gas profits and set parameters for its tariffs, which would be linked to global prices.

Tynwald members will consider the Communications and Utilities Regulatory Authority's (CURA) proposals in March.

CURA chief executive officer Ivan Kiely said the timing was "unfortunate" given the energy crisis and war in Ukraine.

Mr Kiely said there was "little that could be done" to shield the island from the impact of rising global prices, warning prices were currently "four to five times higher than average", which meant it was likely tariffs would rise in the short-term.

However, he said customers would benefit in the long-term, with plans to introduce tighter controls in future.

Tariff adjustment

The proposed new price controls will replace temporary regulation, which was brought in after the end of a voluntary deal between the island's monopoly gas supplier and the government.

If approved, the regulations would come into effect on 1 April for five years, with reviews due twice a year, or triggered if wholesale costs go up or down by 10% or more.

Manx Gas would still be able to set tariffs, but returns would be capped and any earnings above that limit repaid to customers via a tariff adjustment.

That cap has been designed to allow the supplier to service debts and to invest and maintain the island's gas network infrastructure.

The regulator has not yet published the return the new regulations would permit Manx Gas to make.