Tynwald will next week be asked to support a new gas deal for the island.

A new deal with Manx Gas has long been an ambition for the Quayle administration and would represent a big win for the Chief Minister and the government if it passes its final hurdles.

The heads of terms of the deal between Manx Gas and the Cabinet Office appear on the order paper for Tynwald and outlines what form the deal is likely to take.

It was just days before the October sitting when the terms were agreed, leaving Policy and Reform Minister Ray Harmer to adjourn the debate until this month.

In his forward to the terms, Mr Harmer says that while the heads of terms agreement is not necessarily legally binding, if agreed by Tynwald, ’they formalise the agreements reached between the parties to date and will shape the form of the final biding agreement’.

He added: ’The regulation of gas on the Isle of Man is important to our people, our businesses and our environment. The direction for the next iteration of regulation is now in the hands of Tynwald. A voluntary agreement has been progressed and will be finalised by the end of the year, if it is the will of Tynwald.’

Under the previous regulatory agreement signed by the government in 2015, Manx Gas was controversially guaranteed a 9.99% return on capital employed.

But under the new terms, Manx Gas would be permitted to achieve 6.99% - essentially, capping profits at just below 7% for the utility supplier on accounts for domestic customers.

A domestic customer is defined as a small business or household consuming less than 12,000 kWh per annum and covers both natural gas and LPG customers.

There is also a provision within the heads of terms which will put controls in place to ensure any capital expenditure is ’appropriate and warranted’.

Under the heads of terms, Manx Gas would have a number of obligations placed on it. Most strikingly is an agreement that if Manx Utilities reduces the amount currently charged to Manx Gas for a loan given at the time of the 2010 gas network extension, this must be passed onto domestic customers in a ’fair and proportional manner’.

Other obligations include buying gas in a manner that ’provides a balance between the best price and the need for stable prices over an annual buying cycle’. Manx Gas will also compile and maintain a register of vulnerable customers to ensure they receive priority service.

If Tynwald agrees the heads of terms, then the Cabinet Office will be asked to complete a legally-binding deal with Manx Gas by December 31 at the latest. It would run for six years.

That deal would be backdated to January 1 of this year, meaning many residents could be in line for a rebate from Manx Gas in 2021.

If Tynwald rejects the heads of terms, legislation will be brought forward to establish a statutory regulation regime. Mr Harmer has warned this would not likely occur before the end of December 2020.

However, Barry Murphy, who has long led the campaign for a better deal for Manx Gas customers, says the heads of terms ’look oddly familiar, like an upgrade of an unpopular car’.

Mr Murphy added: ’The heads of terms provides an insight into the agreement which will govern the relationship between Manx Gas, customers, and Government till 2025.

’The new agreement provides new checks and balances as recommended by the 2017 review ordered by the Chief Minister. The role of The Communications Commission as an independent arbiter will be central to the success of this agreement.

’However, key questions around consumer protection, refunds for over-recoveries during 2020 and the position of prepaid customers remain unanswered.

’The proof of this agreement, much like a new car, will be judged on its reliability, in this case to deliver fair gas pricing to consumers over its duration.’