Manx Utilities has recorded an overall deficit of £42 million in the financial year of 2022/ 2023.

A spokesperson for the authority said that the deficit resulted from the difference between electricity income and energy supply costs as Manx Utilities continued to shelter customers from far larger tariff increases.

Manx Utilities’ annual report is set to be laid before Tynwald this month.

It recorded an overall deficit of £42.2 million for the authority in the financial year and a £3.2 million deficit in operational costs.

In his opening statement of the report, former chair of Manx Utilities, Tim Crookall, said: ‘The main issues during 2022-23 have been the cost of living crisis and the impact of high wholesale energy prices.

‘Our teams have continued to deliver vital utility services in a reliable and efficient manner during a period of supply chain and inflationary challenges.

‘During the year we have sought to minimise price rises for customers, implementing a 30% tariff rise at the start of the year but with a phased introduction to reduce the immediate impact on customers.

‘The size of the increase was regrettable but necessary due to the rate of losses being experienced.

‘We continued to monitor wholesale energy prices throughout the year and took a number of steps to ensure the impact on our customers was reduced as much as possible.’

He said that forward purchasing for natural gas has reduced customer bills by over £40 million. Forward purchasing, or hedging, is where the price and quantity of a commodity is agreed in advance, that will be delivered and paid for at a future date.

The report later says: ‘Forward purchases have been below maximum levels during 2022-23 due to the challenging wholesale energy markets, while market liquidity has been very low at times with very high forward prices.

‘The high level of market prices has meant a very high financial contribution to offset local generating costs has been achieved during the year.’

Mr Crookall also said that in the period a price freeze had been implemented up until March 2023 to shield customers as well as £25 million being withdrawn from the Bond Repayment Fund to meet additional energy costs.

Mr Crookall added: ‘At the end of the year it was unfortunately necessary to announce further significant electricity tariff increases due to our reduced ability to continue to shield customers from the impact of high wholesale prices.

‘It is hoped that energy markets will continue to stabilise in the coming year and the significant tariff increases that we have had to apply can start to be reversed,’ he added.