Published On: Thursday 04 October 2018 10:18

A new pricing strategy from Manx Utilities proposes inflation only increases for water, sewage and electricity prices for domestic customers over the next five years.

Subject to Tynwald approval the charges for water and sewage would be rebalanced to reflect the cost of these essential services with a cut in water rates of more than 32%.

Whilst sewage charges would go up rebalancing will mean that most households will be paying the same as before and necessary future price increases can be smoothed out to avoid any financial shocks.  The principles of the pricing strategy also provide greater transparency, fairness and protection for customers.

In October 2017 Tynwald agreed to reduce Manx Utilities’ debt by £95 million to £470 million and requested that the Statutory Board come back with a new pricing strategy that would balance the costs of providing services, protect customers and also provide firmer financial stability for the organisation going into the future.  Manx Utilities commissioned an independent external review and will present the proposed strategy to Tynwald on 16 October 2018.

The pricing strategy will continue to be reviewed and overseen by Government.

Chairman Dr Alex Allinson MHK said, “We clearly have a large debt legacy to manage and repay. Thanks to the support of Tynwald and Treasury this pricing strategy will avoid excessive price increases for our customers and provide stability and certainty for the next five years.  Rebalancing of water and sewerage charges will reduce water rates and increase sewerage rates to better reflect the cost of delivering these services”. 

“Furthermore electricity prices will be stabilised and only increased by the annual rate of inflation (CPI).  The strategy will see charges and costs established for a five year period and include obligations on Manx Utilities to continue to deliver efficiencies and cost-effective services.  The strategy is consistent with Government’s social, economic and environmental policies and Manx Utilities is committed to working with Government to support low and middle-income households who will not be disadvantaged by these changes.” 

Whilst the independent report recommended that the current 50% discount for commercial rates is removed, the Manx Utilities Board are instead proposing a much more gradual reduction of 5% per year to 25%.  

Dr Allinson went on to say, “This is not just a long range pricing strategy for Manx Utilities but the start of a vision where we can deliver new technological solutions for our customers to help save energy, improve service levels, tackle important environmental issues, optimise the use of existing infrastructure and support Government’s aims of delivering a smart digital future.”