New laws could allow the Manx government take control of gas firms

The Energy Bill 2022 gives the Council of Ministers powers to take over energy firms

Laws giving the Manx government the power to take control of struggling gas companies in an emergency have been progressed by the House of Keys.

The Department of Environment, Food and Agriculture's (DEFA) Energy Bill 2022 passed its second reading on Tuesday.

DEFA Minister Clare Barber said the legislation "strengthens government's power to intervene" and ensure the island's gas supply is maintained.

The consequence of losing supply was "too dire to contemplate", she added.

'Catastrophic outcomes'

The proposed laws would pave the way for powers allowing the Council of Ministers to temporarily take over a gas firm that had fallen into financial difficulty so that public energy supplies were not affected.

Under that scenario, the government would be required to pay the firm "reasonable compensation" for the intervention, which was intended to be used as a last resort and only with the approval of Tynwald.

The move mirrors laws in the UK, which allows the government there to put firms under similar pressure into administration.

Private firm Isle of Man Energy, formerly know as Manx Gas, is currently the island's monopoly gas provider.

Ms Barber said energy suppliers had been facing "major economic pressure" in recent times, and it was important to have the laws in place to avoid the "catastrophic outcomes" a loss of supply would cause.

David Ashford MHK said he was concerned a lack of clarity over what was "reasonable compensation" could leave the government open to a "messy court case".

In response, Ms Barber said the fee paid would have to be determined within "the particular circumstances" of the emergency.

Recent volatility in the wholesale gas market has seen customers on the island face hikes bills this year, but tariffs are currently under review again by the island's regulator.