The boss of Manx Gas admits talks over a new regulatory agreement could delay moves to scrap controversial banded standing charges.

And Ian Plenderleith said that customers might not revert to band A but could be put on a higher band.

A Chief Minister’s committee report this month called for talks to begin immediately with Manx Gas over a new voluntary regulatory agreement which would included a substantially lower rate of return.

Under the current deal, signed in 2015, Manx Gas is guaranteed profits at 9.99%.

The committee also called for an end to the banded standing charge for domestic customers and its replacement with a flat-rate.

Introduction of the banded system in 2016, outcry among some customers who insisted it was unfair as they were landed with large bills in the summer despite not using much gas.

Manx Gas pre-empted the committee report last month by announcing that it was offering customers the choice of coming off the banded standing charge if they didn’t like it, and reverting to the old system.

Mr Plenderleith (pictured) said then that these customers would revert to the lowest band of standing charge, band A.

But now, with the publication of the committee report, he has indicated this might not be the case.

He pointed out the committee recommended that a ’choice of tariff structure is one worthy of further consideration’ - but also that the ’matter of what a standing charge should cover should be explored further’.

Mr Plenderleith said: ’The committee says consideration should go into what the standing charge should cover and what costs go into it. We welcome that.’

Asked if talks over a new deal might postpone the dropping of the banded standing charge, he replied: ’It’s possible it will be delayed. I hope it would not be.’

And he said customers who do drop the banded system, ’may or may not’ go onto band A. He said: ’It might not be band A. It could be B or C for example.’

Chief Minister Howard Quayle said the government is to give six months’ notice of its intention to end the current agreement.

The gas regulatory review committee concludes that Manx Gas’s profit cap is set too high and there should be more control over tariffs and standing charges.

A consultant’s report, commissioned by the Chief Minister’s committee, concludes that the effect of the introduction of banded standing charges was to increase some customer bills by up to around £100 per annum.

But Manx Gas, for its part, insists the consultants have used out-of date-figures and the variation is more like plus or minus £20 to £30.

The report holds back from saying whether the profits made by Manx Gas were ’unfair’.

It finds: ’On balance, the committee concludes the current regulatory agreement - in the context of 2019 - cannot be said to offer the perception of an ongoing "good deal" for consumers.’

Manx Gas has made its own proposal for a new regulatory mechanism, which it has called MUA-plus.

This features a modified price cap with future tariffs varying in line with CPI-inflation.

Mr Plenderleith said this was a ’positive step forward’.

He said the government recognised the utility fully complied with the regulatory mechanism that was in place at the time and in order to invest in the network it was important that the correct rate of return is set.