Large commercial customers will pay less for gas after the regulator found that Manx Gas [Island Energy] was generating “excessive returns” from businesses.
The Communications and Utilities Regulatory Authority said large commercial customers, those using more than 500,000 units of gas a year, have been paying tariffs at or above domestic levels, contrary to competitive market behaviour.
It said: “Pricing behaviours were reflective of market power, not competition, which is harmful to consumers.”
Under the new temporary measure, the average tariff for regulated commercial customers will be set at 1.5p less than the standard all island central heating rate. The change will last no longer than six to eight months, pending a fuller review as part of the next regulatory framework for 2027-2032.
Almost Doubled
CURA said its analysis shows Manx Gas’s earnings before interest and tax almost doubled in recent years, with “no credible alternative explanation” other than higher revenues from large commercial customers.
Manx Gas had argued the status quo should remain until the next regulatory period, warning of financial impacts. However, the authority rejected this, stating: “It would be too prejudicial to the affected customers to follow that course of action.”
The regulator confirmed that Manx Gas remains financeable as a standalone entity under the new tariff, with debt covenants still met.
The changes will be subject to public consultation before final regulations are laid before Tynwald.