Tynwald has voted in principle for a new regulatory deal with Manx Gas.

The government will now go on to negotiate head of terms for the new voluntary agreement which will be brought to parliament in October.

A petition from the Isle of Man gas customers working group, which collected more than 2,200 names in three weeks, was laid before the court. It urged Tynwald to reject a voluntary agreement and support instead a timetable for imposing statutory regulation of all the utilities, starting with Manx Gas.

Legislation for gas regulation will be brought forward in tandem with the negotiations over the voluntary agreement.

The proposed deal will see a reduction in the natural gas tariff for regulated customers of 7.4% due to the weighted average cost of capital (WACC) reducing from 9.99% to 6.99%.

Policy and Reform Minister Ray Harmer urged members to ’move forward to secure the best deal for the island’.

But Kate Lord-Brennan MLC asked: ’Is it fair and equitable and sensible overall in the long term? Who is making the concessions? Is it going to deliver what we need? I’m not 100% sure.’

Douglas East MHK Chris Robertshaw questioned why business customers using more than 12,000kWh are excluded from the agreement.

Bill Shimmins (Middle) said he had a nagging fear of creative accounting in terms of how a business allocates costs.

He insisted that he was not in any way suggesting Manx Gas is ’unscrupulous’ but said it is possible to remove costs from the regulated side of the business to the unregulated, and vice versa - and this could result in bigger bills more for domestic customers. He also queried who is going to police the agreement.

And Mr Shimmins said it was ’unfortunate’ that the costs of the pension deficit could be passed on to customers.

He said there were a lot of unanswered questions. ’This has not gone stonkingly well over the last three years. I would suggest, learning from the past, that the detail matters,’ he said.

Lawrie Hooper (Ramsey) urged members to back the proposed deal.

He said: ’Does this agreement tick everyone’s box and do 100% of things it needs to do? The answer is probably not - not from government’s perspective, not from Manx Gas’s perspective.

’But does it get us 80% of the way there and can we get 100% in the time this agreement is active? I think the answers to those questions is "yes".’

Tynwald voted last month to give Manx Gas notice to end its controversial regulatory deal with government which allowed it a guaranteed 9.99% return.

Douglas Central MHK Chris Thomas, who had led negotiations on a new deal before he was sacked as policy and reform minister, said the document ’lacks detail’ and there was an ’absence of clarity’.

He queried why return on capital employed (ROCE), the phrase use in the old deal, had changed to weighted average cost of capital (WACC).

Chief Minister Howard Quayle said he had lobbied against the 2015 deal even before he was elected to Tynwald, saying the guaranteed return of 9.99% was far too generous.

He criticised former Minster Thomas for failing to secure a deal.

’I was tickled pink when he said "action not talk",’ said Mr Quayle. ’He was the chap in charge of negotiating and didn’t get anywhere despite me chasing. He had three or years to get it done and he didn’t.’

He urged members to give the motion the benefit of the doubt as both potential solutions - voluntary and imposed regulation - would be developed in parallel.

But he said there is no guarantee that legislation will achieve a better outcome than negotiations have achieved.

Tynwald voted to support in principle the proposals for the voluntary regulatory agreement by 16 votes to six in the Keys and by eight to one in LegCo.