The boss of Manx Gas is pulling the plug on the company’s controversial banded charges regime once and for all, we can reveal.

Ian Plenderleith has exclusively told Business News that the system was being scrapped from January 1 and will be replaced by a return to the old 16 pence a day Band A ’charge’ for all customers.

He said: ’I’d like to let everybody know that the banded standing charge regime in the Isle of Man will disappear as of January 1, 2020.

’The reason we had not made that announcement public yet is that we are still in discussions with the OFT (Office of Fair Trading) and there is a timeframe for approval prior to this being finalised.

’But from my perspective my commitment to remove the banded standing charge from January 1, 2020, is there and strong. We are committed to doing it.’

Under a charging regime introduced in January 2016, the old 16p a day standing charge was replaced with a banded system ranging from 50p a day to 213p a day (now 51.2p to 218.2p).

That was so unpopular protesters held demonstrations outside the company’s headquarters on the South Quay in Douglas.

In February, Mr Plenderleith announced a change that allowed customers to opt out of the banding system.

Now the company is to scrap the standing charge system entirely.

Asked why Manx Gas was making this move, he said of the current system: ’Initially it was done with the best of intentions and was designed to help people smooth their bills across the year. But clearly that was lost in communication, perhaps it wasn’t communicated particularly well.

’A significant proportion of customers did not agree with the banded standard charge regime so clearly it wasn’t too popular with all of our customers.’

Mr Plenderleith has been managing director of the International Energy Group, which owns Manx Gas, for the last 18 months. He inherited the current controversial standing charge regime which has now been in place for three years.

He said he wanted to gauge more closer contacts with the views of customers through various initiatives including one called ’Rant and Rave’.

He said: ’It is important to be looking at a system that will give customers more control over their energy bill.’

He added: ’Midway through the first quarter of this year we announced that anybody who wished to change from the current regime to the old one, could do so.

’But we have not actually had that many people who wanted to change, I would say, but what we did find was that when people were asking about it they were not sure whether it would be beneficial or not for them.

’It caused some confusion for people and we looked at it and thought: "We don’t want people being confused, thinking whether they were making the right or wrong decision".

’So we took the decision to go back to the old standing charge regime which we know did not really attract that many negative communications or comments from our customers.’

Mr Plenderleith confirmed that the move meant we would be returning to the ’very low’ standing charge, a ’very low proportion of the bill’.

It is also the equivalent of the current Band A, round about 16 pence a day, ’which is a much smaller proportion of the customers’ bills ’which enables greater controllability for customers over a far larger proportion of their bills’.

It amounted to less than 10% of the yearly bill for the average customer.

Mr Plenderleith said the current system had been a ’concern’ for customers who wanted to manage their energy bills.

’It was a concern for them that for instance, to think they might have to pay £200 before they put the heating on,’ he said. ’That figure will considerably reduce now.’

Business News asked if he was conceding defeat by announcing this move to scrap the banded charges system.

He replied that the system now in place was ’done with the best of intentions’.

’It did not work, we have learned from that. We have listened to customers and the main thing and most important thing is that we have listened to our customers. We can better understand what they want and we have put in place a scheme, which we hope now will meet with the majority of the requirements of our customers,’ he said.

’It will give the majority of our customer far greater control over their gas bill.’

Mr Plenderleith said the move was unlikely to make any difference to people’s overall bills.

Asked if Manx Gas was planning to increase general gas use of charges. He said: ’Not as things currently stand, no.’

He added that was largely driven by the price of natural gas, how cold or warm the year is and general cost inflation within the company.

’We can’t manage the weather and we can’t manage the price of natural gas.’

Not so lucky are the customers of Guernsey Gas and Jersey Gas, which are also owned by the IEG group.

Last week it was announced that customers there are facing average gas bill increasing by around 3.8% per year, meaning households in the Channel Islands will face an increase of £35.

Mr Plenderleith, who is also at the helm of those companies, explained: ’This price increase is directly due to the significant reduction in the pound to dollar exchange rate and its impact on the price we pay for Liquid Petroleum Gas.’

This is not a problem facing the Isle of Man where there is more reliance on natural gas. Mr Plenderleith said that natural gas was priced in British sterling and not American dollars, so the foreign currency risk was not so great.