Manx Gas was clearly stung by criticism of the banded standing charge introduced three years ago.

Customers thought it was unfair - although for most it made little difference to the size of their total bill over the course of the year.

But with some households were landed a £100 bill in the midst of the longest summer drought on record, the risk of damage to the utility’s reputation - including the threat of further public protests- could not be ignored.

And with a government report into gas regulation due out imminently, it was timely to announce that customers’ concerns had been listened to.

Speaking from his office at Murdoch House on Douglas’s South Quay, Manx Gas’s group managing director Ian Plenderleith told iomtoday: 'We are very conscious of the criticism we’ve faced from the government and from the people more so.

'We’ve listened to the views and as a consequence we are giving customers a choice of the standing charge they would wish to be on.

'Those people who don’t like the current standing charge regime can go back to something very similar or even the same as the old regime which was a lower standing charge - and those who like the current regime with a high standing charge and a lower unit rate will be able to stay on that.

'Some may like that so what we are offering is choice.’

He said he wouldn’t know how many would want to stay on the banded standing charge structure. ’It would be wrong for me to try to second guess,’ he said.

'The main thing is, whichever one you preferred, you can take. It’s always nice to give customers that choice.’

Mr Plenderleith said Manx Gas had been invited to participate in the government’s review of the regulatory arrangement, under which the utility’s profits are capped at 9.99% - but he insisted he didn’t know the contents of the report.

'I couldn’t comment on what’s going to be in the report because I genuinely don’t know. But if we don’t start to formulate our plans now, if we didn’t make the change in the first quarter of this year, we would then have to wait another year,’ he said.

He explained that given the peaks and troughs of gas supply with lots of gas used in winter and little in summer, changes to standing charges can only be made at the end of the full annual cycle.

'This is what we have been looking to do, this is what we would like to try and do and this is our window of opportunity to do something about it,’ said Mr Plenderleith, who took over the helm at Manx Gas 12 months ago.

The move will take effect from bills that households get in late March and April.

Asked if he would have introduced the new regime if he had been in charge, he replied: 'I’m not an enormous fan of a high standing charge so the answer is probably no, I wouldn’t.

'If a gas customer has not had their heating on through the summer period and you are expecting a bill for cooking of £10-20 and get a high bill of £100 with the majority of that standing charge then you as a customer are going to find that difficult to understand.

'I’m always of the view that if something is going to fail the "man in the street" test, then you are always on the back foot because you have to explain yourselves.

'It was well-intentioned, it was intended to smooth bills across the year and help with the winter peak as the winter bills will be lower. But it fails the "man in the street test" once you get to the summer bill period.

'It’s the summer period when we tend to get most of the complaints. As an organisation you have to listen to your customers and ask if this is working on behalf of the people we serve.’

He said the system was designed to be revenue neutral, and cost neutral for customers across the year.

'If it’s not working on behalf of customers you have to ensure you take into account their views and put in place a charging structure that they feel confident about and comfortable with.’

Manx Gas has done an analysis across all the bands and found actually there were very few who had seen a variation in the size of their bills.

'It is in the order of plus or minus £20-£30 a year tops and that would be very few customers, we are talking small numbers,’ said Mr Plenderleith.

In band B, for example, the difference with the old system ranged between minus £10 and plus £13, in average band C it was between minus £8 and plus £15, and in band G, the difference ranged between minus £7.40 and plus £17.

Mr Plenderleith said: 'We monitor all complaints about all aspects of service not just billing. On average we get three to four written complaints a month and of that you probably don’t get more than one a month about the banded standing charge.

'So while it has been a topical issue, a very important issue that has upset a number of our customers, we haven’t seen a huge volume of complaints.’

He said that Manx Gas would always look into any cases where customers may have been placed in the wrong band as their circumstances have changed significantly.

Recently, the utility introduced a new customer engagement system called 'Rant and Rave’.

Mr Plenderleith said: 'We wanted to understand what the customers thought about the company and the service they were receiving. I’m delighted to say from a customer service perspective we are averaging 4.8 out of 5.

'You would be surprised at how few actually have commented on the standing charge.’

Manx Gas can boast a lot of achievements, too, he said - including a significant investment programme to deliver a safe and secure gas network, few interruptions to supply and a very fast response rate to emergency call-outs of 99-100% in one hour, which is better than the gas distribution networks in the UK.

'This shows our commitment to a resilient 24/7 service every day of the year,’ said Mr Plenderleith.

He said the company has significantly expanded its community engagement and vulnerable customer programmes, working with Manx Decaf (Alzheimer’s), Age Concern and the Salvation Army.

It is also looking at implementing a social tariff for vulnerable customers.

And he said there are other successes that get overlooked.

Overall bills are 6% lower than they were four years ago. ’That’s something we are very proud of - there aren’t many organisations that could say that,’ he said. 'Manx inflation in that time has been 19%, that’s a real price reduction of 25%.’

profit cap

'We work within a profit cap regulatory mechanism. We are returning through the mechanism another £1m to customers. If we make efficiencies in the cost structure, that is passed back to customers.’

As far as the regulatory mechanism is concerned, Manx Gas’s MD said the utility was looking forward to sitting down with government and discussing what a new regime could look like.

But he believes the current arrangement has worked for customers and for the company.

'You’ve got 6% lower bills, you’ve got £1m going back to customers, you’ve got a 19-25% real (after inflation) reduction in prices, and the company has made a lower rate of return than the gas companies in Great Britain,’ he said.

Mr Plenderleith said the company has to make long-term investment decisions and for that it requires a degree of certainty about the regulatory regime.

'Once you’ve got into a form of regulatory system that is clear and understandable then that enables you to plan your investments into the network, into customer service, into public safety,’ he said.

'We run a network of hundreds of kilometres and facilities in different parts of the island.

'It’s important we have a long-term funding structure in place so we can efficiently invest to deliver a safe and secure service.’

Mr Plenderleith revealed plans for a £10m investment programme to bring natural gas to an extra 2,000 homes which still use LPG.

There are 20,000 customers currently on natural gas. The investment would extend natural gas to homes in St John’s, Jurby, Andreas, Laxey, Santon, Mount Murray and Foxdale.

'We are looking to do this over a number of years on a scheme by scheme basis,’ said Mr Plenderleith, adding that no government funding for this would be required.