Isle of Man Energy says it is taking legal advice over a decision by the regulator to cut gas tariffs for around 30 of the island’s largest commercial customers.
The decision by the Communications and Utilities Regulatory Authority will set the average tariff for consumers using an average more than 500,000 units a year.
This will be set at 1.5p per unit below the all-island central heating rate which is currently 10.287p - so they will be paying around 14.5% less than a domestic customer.
The biggest beneficiary are likely to be the government and other providers of public services.
CURA said tariffs for large commercial customers were inconsistent with competitive market behaviour and they were paying a rate at or above those paid by regulated domestic customers.
Currently, there are no published or official commercial tariffs and customers pay a rate based on individual agreements.
CURA also said that the utility company’s returns from such customers were above reasonable levels.
The regulator insists there will no impact on domestic customers as the regulator specifies the parameters within which tariffs are set, based on how much revenue Manx Gas is allowed to earn.
Isle of Man Energy said the company is now ‘carefully reviewing the implications of the ruling and is taking legal advice’.
‘We are proud to provide the lowest-cost energy on the island and will continue to protect customers from the full impact of market volatility through our hedging strategy.
‘Our focus remains on supporting customers and maintaining stable, competitive energy pricing for the island.
‘We are now reviewing the implications of the decision, taking legal advice and continuing to engage constructively with CURA as part of the process.’
Isle of Man Energy had already confirmed that unregulated commercial gas tariffs will remain at their current rate through to late 2026, which it said would provide longer-term certainty for business customers.
Domestic regulated tariffs have also remained steady with only a modest increase expected following the scheduled tariff review in June.
CURA had consulted on its proposals for commercial customers’ gas tariffs.
Manx Gas raised concerns about the financial impact of the proposed measures and whether CURA had the powers to take such action. It also questioned some of the analysis that had been carried out.
But the regulator said it could not allow the current situation to continue.
It agreed, however, to address the issue of commercial customers in more detail as part of the next regulatory framework for 2027-2032.
CURA said it will seek Tynwald approval for the reduced rate which will be in place for six to eight months until the new framework is put in place.
A spokesperson for the regulator said: ‘The decision will have no impact on customers who are consuming less than 500,000 kWh.’