Published On: Wednesday 24 August 2022 07:50

There will be no changes to electricity tariffs until 31 March 2023 following a direction from the Council of Ministers. This means that electricity tariffs, which are 22% below the current UK OFGEM price cap, will remain at 1 July 2022 prices.

The Government will loan Manx Utilities up to £26 million, to be repaid over 20 years, to fund the price cap and support Island residents and businesses during these exceptionally challenging times.

Historically natural gas has been purchased on the wholesale market for around 50 pence per therm, however prices began to rise in summer 2021 and have further increased due to the Ukraine crisis.  Rates in the region of £6 per therm have been observed with current forecasts showing Manx Utilities’ fuel bill potentially peaking at circa £120 million as opposed to the pre-crisis bill of circa £15 million.

Manx Utilities has spent many months doing all it can to shield customers from the volatility of global wholesale natural gas prices, undertaking a robust hedging policy and prudent management of financial reserves.  The organisation has remained duty-bound to protect its customers however ongoing cost pressures would have seen the introduction of an initial tariff increase of 70% from 1 October 2022 to meet the costs of supplying electricity to the Island.

The Council of Ministers and the Treasury met with the Manx Utilities’ Board to consider the various options available to support the national interest and the viability of the organisation and the essential services it provides to every home and business in the Isle of Man.  As a result, tariff increases will be factored into bills over a longer period from 1 April 2023 to avoid the high price peaks being passed on to residents and businesses this winter.

Chair, Rob Callister MHK said, ”I would like to thank the Council of Ministers and the Treasury for working closely with the Board in order to achieve an outcome that supports all our Island’s homes and businesses.  In the meantime, I believe we all need to think about how we use energy more efficiently whether at home or at work to help bring down our costs and help the environment.  We also need to consider protecting the Island’s power network from being overwhelmed this winter, when capped tariffs could potentially mean electricity is the fuel of choice.

“Looking to the future, Manx Utilities is working closely with the Climate Change Board to deliver on Government’s plan of implementing renewable generation solutions for our Island as we transition away from a dependency on fossil fuels; I look forward to sharing more as plans progress.”