Phasing electricity prices cost Manx Utilities £5m, chairman says

Manx Utilities' prices have been frozen until the end of March next year

The cost to Manx Utilities of phasing in energy price hikes will have to be taken into account in future, the energy provider's chairman has said.

A Tynwald committee heard spreading this year's 30% increase into two 15% uplifts had cost £5m to implement.

Tim Johnston MHK said the impact had to be factored in to any future hikes that may be needed, when a government-backed price cap ends in April.

The firm would have a better idea of the markets in the new year, he added.

But if a "huge" increase was necessary, the publicly-owned supplier would need to discuss its approach with the government, Mr Johnston said.

Electricity prices on the Isle of Man were frozen for six months in September after the Manx government gave the firm a £26m loan to fix tariffs until the end of March 2023.

"To the wire"

Giving evidence to Tynwald's Economic Policy Review Committee, Mr Johnston said he could not rule out a bid for further government help, but said a fall in gas prices meant more support should not be required.

The committee heard it will cost a household £17 a year on average to pay back the current loan over the next two decades.

The company's chief executive Phil King said, given its financial position, external advice from industry specialists had been sought on how the firm should set its pricing strategy for next year.

The committee heard how the energy provider had debts of about £470m and was forecasting a £50m loss at the end of March.

Mr King said firm had "taken it to the wire" in terms of its viability as a company after the "colossal" shocks of global gas price changes.

"We have never know anything like this at all, it is so volatile, it is a really difficult market to trade in," he added.