Manx Gas’s profit cap is set too high and there should be more control over tariffs and standing charges.

That’s the conclusion of a government report that recommends a new voluntary regulatory agreement is urgently negotiated which will include a significantly lower rate of return.

The Chief Minister’s committee report was published this week, just over a fortnight after Manx Gas announced it was dropping its controversial banded standing charge.

A consultant’s report, commissioned by the Chief Minister’s gas regulatory review committee, concludes that the effect of this change was to increase some customer bills by up to around £100 per annum.

Manx Gas, for its part, insists the consultants have used out of date figures and the variation is more like plus or minus £20 to £30.

But the focus of the committee review is on the profits made by Manx Gas.

It looked at whether the regulator agreement signed by the government in 2015 - which capped a guaranteed return on capital employed at 9.99% - was a good deal, whether the profits made were fair and whether bills bore comparison with other jurisdictions.

The report 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.’

But it holds back from saying whether profits were ’unfair’.

The report recommends that a rate of return in any future regulatory agreement should be ’significantly lower’ than the current 9.99% rate.

Chief Minister Howard Quayle said six months’ notice would be given to terminate the current agreement and negotiate a better deal.

He said: ’The last deal was a step in the right direction. It reduced Manx Gas’s profits down to 9.99%. Savings were made to customers.

’But we have to make sure those profits are fair and equitable for customers.’

The committee report also recommends that Manx Gas should lower its gas supply deposit, currently £250, to help those on low incomes meet the cost of heating their homes.