Manx Gas is dropping its controversial banded standing charge system for those customers who don’t like it.

Managing director Ian Plenderleith said the structure had been introduced with the best of intentions but it had failed the ’man in the street’ test.

And he said he would never have brought it in if he had been in charge at the time.

Under the new 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).

At the same time, the central heating tariff was cut from 8.22p to 6.26p a unit. It’s now 5.82p a unit.

Manx Gas stated this provided a clearer pricing structure and even out the size of household bills over the year.

But it sparked a series of public protests, with customers complaining about getting bigger bills in the summer despite using little gas.

A Chief Minister’s committee report into gas supply and regulation is expected imminently.

Mr Plenderleith insisted that he does not know what it will say.

But as exclusively revealed in this week's Examiner, he said: ’We’ve been listening to our customers and wanting to understand what they thought of the standing charge regime.

’We are now looking to implement a new scheme that will offer customers choice. Customers who do not like the current scheme will be able to change but those that do like it - and there may be some out there - will be able to continue.

’So we think it’s a real step forward to ensure customers have choice.’

Central heating customers who choose to return to the old scheme will go back to the same tariff as before, which is band A (currently 16.89p a day standing charge and 7.64p a unit tariff).

Mr Plenderleith said: ’I think it was a well-intentioned scheme, it was trying to help customers smooth their bills throughout the year. The challenge you have with the scheme, of course, is that many customers didn’t understand that.’

He said customers expect a small bill in the summer and don’t understand why they have perhaps £100 to pay in standing charge.

’That’s a very nasty surprise for people. They don’t understand why that’s the case,’ he said.

’It’s incumbent on myself as managing director to listen to those views and take them into account. A tariff scheme needs to pass the "man in the street" test and ultimately, as well-intentioned as this was, it didn’t.’

He insisted people were not over-charged. There were small movements between bands in the region of perhaps plus or minus £10 or £20 a year at most but the scheme was constructed to be cost neutral for customers and revenue neutral for the company.

Mr Plenderleith accepted the standing charge issue had ’certainly not helped’ boost the reputation of the company. ’That’s why we’ve addressed this now,’ he said.

’But there are many aspects of the service provided by Manx Gas that we know our customers like. We have invested significantly in the network to ensure it delivers a 24/7 service and meets the highest standards for public safety.

’We’ve also put in place a new customer service system "Rant and Rave" where we are scoring very highly - 4.8 out of 5, which is a gas industry leading score.

’And there’s our prices: since 2015, prices are 6% lower - there aren’t many other organisations able to say that. And also in that time as part of the regulatory mechanism, we are returning just about £1m to customers.

’So there are a lot of good things we’ve done. It’s just a shame that sometimes the standing charge perhaps has got in the way of everyone recognising the fabulous job that the people of Manx Gas do on a day-to-day basis.

The changes will be implemented in late March-April, at the end of the annual gas supply cycle.

Mr Plenderleith also announced plans for a £10m investment programme to bring natural gas to an extra 2,000 homes currently on LPG.

This would be funded entirely by the privately-owned utility but will require Manx Gas having certainty over its long-term funding structure.

This in turn will depend on the outcome of talks with government over a new regulatory regime.

Under a regulatory agreement with the Office of Fair Trading and Treasury which came into force in January 2015, Manx Gas’s profits are capped at 9.99%.

A Chief Minister’s committee, chaired by Policy and Reform Minister Chris Thomas, has been reviewing that arrangement and is to report back by the end of this week. Its findings are expected to be made public.