Quayle defends hike in electricity prices

Howard Quayle MHK

Howard Quayle MHK

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Outgoing Manx Electricity Authority chairman Howard Quayle has defended the increase in the cost of power.

The MHK, who was appointed as Health and Social Care Minister on Monday, said: ‘The final decision was not one made lightly.

‘The board were keen to ensure as little pain as possible for customers, whilst supporting the economy and needing to address the debt.

‘Prior to the approval of the merger with the Isle of Man Water and Sewerage Authority the increases proposed were significantly more and I am pleased that going forward we now have the debt issue contained and I look forward to seeing further benefits as synergies are identified.’

Isle of Man Today reported on Wednesday that the price of electricy would rise. This story received a number of comments from readers.

During the last three years Manx Electricity Authority, working with the government, has frozen tariff increases.

But from April 1, tariffs will increase by 2.5 per cent, and the ‘prompt payment discount’ will reduce from 2.5 per cent to 2 per cent.

The MEA blamed ‘rising fuel costs over recent periods’ and the government’s budget rebalancing programme for the rise.

With an overall increase of 3 per cent, the authority says tariffs remain in line with inflation as previously stated by the Chief Minister in his address to Tynwald in October 2013.

For the average domestic customer using 4,200 units a year, who receives prompt payment discount, the annual increase is £21.60.

The standing charge is included in the increase.

This is increasing from £42 plus VAT a year to £43 plus VAT.

Discounts of £4 plus VAT a year for customers paying by direct debit, and £2 plus VAT year for e-billing, are also available.

The ‘Big Six’ energy companies in the UK have introduced average 5.8 per cent rises over the last six months.

The MEA is to merge with the Water and Sewerage Authority to form the Manx Utilities Authority.

Mr Quayle’s comments about the price rise came as he prepared to leave his position as chairman of the MEA.

‘I would also take this opportunity of wishing all the staff of the soon to be “Manx Utilities Authority” my best wishes in this new chapter of providing essential services to this isle.

‘It has been a short period of office at the MEA, however, one I have very much enjoyed and I am sure the new team will support the new chairman and board extremely well.’

The rise in the price of electricity was signalled in Treasury Minister Eddie Teare’s Budget speech last month.

Then he said: ‘Treasury believes that the MEA has now reached its peak debt in terms of the amount owed back to the Capital Fund.

‘We should remember that the Capital Fund is, in effect, internal to government, with external debts being the two bonds for the utilities totalling £260 million.

‘In the years ahead it will, as part of the Utilities Authority be repaying to the Capital Fund more than it borrows each year, and this will finance a growing proportion of our future capital programme.

‘I have heard comment to the effect that the public are paying for the MEA debt.

‘If we did not have a plan for the repayment of capital funds the public would indeed be paying, in terms of a lack of new school buildings, roads or even sewerage treatment works.

‘The plan outlined protects all these and deserves support.

‘It deals with a problem that has been unresolved for the last decade.’

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