Manx Gas MEGA Price Rise

[Andy Onchan]

16 hours ago, Happier diner said:

And what's the shame in that? That's why they are in the game.

No shame whatsoever, except that it's clearly not the right model for IOM. MG is an unnecessary intermediary in the whole affair. I've never really understood why we need such an arrangement. And if I'm not mistaken I think Chris Thomas may well be of the same opinion, for what it's worth.  

[cissolt]

Thanks Barry, I've listened to the whole thing.

Has the decision not to allow MG to hedge caused a higher price rise than we would have expected?  Seems like a strange decision from the Mua if it affected the prices for all consumers.

Hopefully the regulators get a grip of the MUA next.

[Bazza Smurf]

2 hours ago, cissolt said:

Thanks Barry, I've listened to the whole thing.

Has the decision not to allow MG to hedge caused a higher price rise than we would have expected?  Seems like a strange decision from the Mua if it affected the prices for all consumers.

Hopefully the regulators get a grip of the MUA next.

I really don't like to speculate. I try to focus on the things that I can have some influence on. First part is to keep pushing MG to repay its share of the rebate/refund and to ascertain as to why the OFT appears not to have fulfilled it's regulatory obligations all the way till the end of 2020. 

Regarding the MUA, it just seems clear to me that nobody seems to care ever about consumers when it comes to gas certainly up till this year. At least if I have a question now, CURA are prepared to answer it. Wholesale gas went as low as 13p a therm in 2020 and remained low part way into 2021. The very fact that gas consumers continued to pay regulatory adjustments into 2021 is another shambles. Where on earth has all the money gone?  So many unknowns. 

So far Chris T has been in front of the Committee along with me, 'likely' a private session with the Cabinet Office and Manx Gas. Up soon should be OFT and CURA. More to come out soon I hope. 

I am currently organising a question and answer session with CURA if anyone is interested in coming along. I will post a date once I get it. I appreciate many think it's a waste of time, but keep trying I will. 

[Bazza Smurf]

Some decent coverage of Tuesdays proceedings here. The bit regarding lack of information is to do with refunds. 

 

https://podcasts.google.com/feed/aHR0cHM6Ly93d3cubWFueHJhZGlvLmNvbS9wb2RjYXN0cy85OTM5NTUueG1s/episode/bzYxLTIzNDYtNjI1NmM2YzA5NzMxNA?ep=14

[Happier diner]

3 hours ago, SleepyJoe said:

If MGs gas usage is minor in comparison to that of MU, would the latter be exposed to much of a risk?

Even there small amount must be worth a few million

3 hours ago, John Wright said:

That rather depends on the payment terms between MG & MUA. Do they pay in advance or in arrears?

I think thats the nail hit. I guess the MUA have to pay in advance but they don't make MG pay in advance. In that way MG become creditors

[SleepyJoe]

1 hour ago, Bazza Smurf said:

I really don't like to speculate. I try to focus on the things that I can have some influence on. First part is to keep pushing MG to repay its share of the rebate/refund and to ascertain as to why the OFT appears not to have fulfilled it's regulatory obligations all the way till the end of 2020. 

Regarding the MUA, it just seems clear to me that nobody seems to care ever about consumers when it comes to gas certainly up till this year. At least if I have a question now, CURA are prepared to answer it. Wholesale gas went as low as 13p a therm in 2020 and remained low part way into 2021. The very fact that gas consumers continued to pay regulatory adjustments into 2021 is another shambles. Where on earth has all the money gone?  So many unknowns. 

So far Chris T has been in front of the Committee along with me, 'likely' a private session with the Cabinet Office and Manx Gas. Up soon should be OFT and CURA. More to come out soon I hope. 

I am currently organising a question and answer session with CURA if anyone is interested in coming along. I will post a date once I get it. I appreciate many think it's a waste of time, but keep trying I will. 

Oh I don't think it is a waste of time at all - it's of vital interest to gas consumers & just the sort of thing the House of Keys should be examining

Be great to see Mr Thomas produce a paper on all this

[Banker]

6 hours ago, Non-Believer said:

A difference of opinions then; plus the MUA stated yesterday that they are keeping the situation under review pending the supply of such requested information. The ball would appear to be in MG's Court.

 

According to Rob Callister the balls in MGs court!!

Chris Thomas tweeted that Rob was saying MG should have hedged more to avoid these rises but MUA wouldn’t let them hedge!!! Rob of course says it’s not true!

[SleepyJoe]

[Happier diner]

2 hours ago, Banker said:

According to Rob Callister the balls in MGs court!!

Chris Thomas tweeted that Rob was saying MG should have hedged more to avoid these rises but MUA wouldn’t let them hedge!!! Rob of course says it’s not true!

How could the MUA stop them hedging? More like they wanted to hedge with the MUA's money perhaps. To hedge anything, its cash upfront surely. 

 

Edited April 14, 2022 by Happier diner

[Bandits]

39 minutes ago, Happier diner said:

How could the MUA stop them hedging? More like they wanted to hedge with the MUA's money perhaps. To hedge anything, its cash upfront surely. 

If it’s looking hairy it’s usually just a margin call by the broker depending on the risk. No requirement to fund it all up front. 

[Happier diner]

39 minutes ago, Bandits said:

If it’s looking hairy it’s usually just a margin call by the broker depending on the risk. No requirement to fund it all up front. 

Perhaps. But then a broker would probably see MUA as very low risk. Manx Gas? Perhaps not in the same category. 

If I owned MUA would I be buying gas for them in advance in the current climate. No way!

[Bandits]

11 minutes ago, Happier diner said:

Perhaps. But then a broker would probably see MUA as very low risk. Manx Gas? Perhaps not in the same category. 

If I owned MUA would I be buying gas for them in advance in the current climate. No way!

The MUA would seem to be the broker here though. They sell/deliver gas to the connectors that connect into the Manx Gas network. The trades seem to go through the MUA brokering function. So when the MUA Chairman says that Manx Gas had the opportunity to hedge to protect consumers and didn’t he sort of really means that the MUA had the opportunity to facilitate trades on their behalf but ultimately didn’t. 

[Happier diner]

8 minutes ago, Bandits said:

The MUA would seem to be the broker here though. They sell/deliver gas to the connectors that connect into the Manx Gas network. The trades seem to go through the MUA brokering function. So when the MUA Chairman says that Manx Gas had the opportunity to hedge to protect consumers and didn’t he sort of really means that the MUA had the opportunity to facilitate trades on their behalf but ultimately didn’t. 

Maybe. We are speculating a bit here. I am sure there will be more than this than meets the eye. Of ot was that simple, what changed this time around? 

[Bandits]

1 minute ago, Happier diner said:

Maybe. We are speculating a bit here. I am sure there will be more than this than meets the eye. Of ot was that simple, what changed this time around? 

I’m not speculating really. There is something odd here which needs to be explored.   Manx Gas are total private equity bandits who would sell their grannies for a few extra basis points. But clearly they tried to hedge their position (which should have insulated IOM consumers from some of the increases) but were prevented from doing so. This is after the MUA effectively gifted about £16M of lost profits to provide electricity discounts across the main MUA electricity users. So I’d ask what was the worst position that would be assumed by the MUA? Was it anything more than the MUA underwrote to already provide discounted electricity to their main users? Never go into competition to government in the IOM. 

[Ringy Rose]

15 hours ago, Bandits said:

They werent asked for any evidence according to her statement neither were any other mechanisms discussed that might give them any better security. 

I wouldn't believe a word of what comes out of Jo Cox's mouth. She's a liar in a long line of Ancala liars.

What other "mechanisms"? Doesn't matter how you slice it, if Ancala say they don't have any money then only an imbecile would extend any form of credit to them. Because if Ancala were telling the truth then MG were weeks from going bust. CURA think they genuinely did have cash flow issues. I wouldn't put it past Ancala to use bankruptcy as a negotiating tactic; it's a hedge fund staple.

There is a reason why the new regulatory regime has split out the network costs from the retail costs. I'm revising my opinion of CURA, certainly the CEO seems more switched on than I gave him credit for earlier in the thread.

My understanding is that MUA are not a broker, they are a reseller. And, simply, if they hedged they'd be supplying gas to MG that they'd never be paid for.

Edited April 14, 2022 by Ringy Rose