Manx Gas MEGA Price Rise

[SleepyJoe]

2 hours ago, Bazza Smurf said:

I am currently in the process of organising a question and answer session with the CEO of CURA for members of a Facebook group which I admin. Is there anyone on here that would like to attend? Seems to me like there are lots of unknowns. Be nice to get them known. 

The q&a session will likely be Douglas on a Mon, Tue, Wed after 6.30pm and within the next month or so. I'm just trying to get an idea of numbers now. 

Be great if it could be recorded or broadcast online. Perhaps the national broadcaster might involve itself with it's high tech equipment . . . . 

[Bandits]

45 minutes ago, SleepyJoe said:

The issue is that - in it's actions - the MUA wasn't necessarily looking after the best interests of the hard pressed Manx consumer

Then blamed Manx Gas for not hedging when they clearly knew why Manx Gas hadn’t hedged. 

[Happier diner]

2 hours ago, SleepyJoe said:

The issue is that - in it's actions - the MUA wasn't necessarily looking after the best interests of the hard pressed Manx consumer

That's not their job. Outside of their remit. Their job is to protect the authority. Its not a charity. 

1 hour ago, Bandits said:

Then blamed Manx Gas for not hedging when they clearly knew why Manx Gas hadn’t hedged. 

Not sure knowing about something about someone stops you for blaming someone. 

That's like you telling me you are putting your life savings on a horse and them blaming me for not stopping you.

[SleepyJoe]

Protect the authority? The MUA is owned by the taxpayer - it's not a living entity or a private institution. They're certainly behaving like the latter

[Happier diner]

40 minutes ago, SleepyJoe said:

Protect the authority? The MUA is owned by the taxpayer - it's not a living entity or a private institution. They're certainly behaving like the latter

It is the board of directors responsibility to act in the interest of the Authority. They are not political. If there was a public interest, then that's for the politicians to work out. 

[SleepyJoe]

No, the authority - directors & all - must act in regard to it's remit from government, representing the owning taxpayer

[Bandits]

3 hours ago, Happier diner said:

Not sure knowing about something about someone stops you for blaming someone. 

That's like you telling me you are putting your life savings on a horse and them blaming me for not stopping you.

Well it does when you accuse them of not doing something that you had an active part in them not doing. You analogy doesn’t stack up. It’s like telling someone to put their life savings on a horse and then refusing to place a bet for them. Then after the horse has won telling them that they're an idiot as they should have put money on that horse.

[Ringy Rose]

7 hours ago, SleepyJoe said:

The issue is that - in it's actions - the MUA wasn't necessarily looking after the best interests of the hard pressed Manx consumer

Were they not? If Manx Gas went bust and left the MUA with a £10m unpaid debt, who do we think would be paying for it.

Hedging is a lot of money. MG say they saved about £2.5m last year through hedging, and MG also say this was about a 10% saving. So the upfront cost of last year's hedging was around £20m, based on MG figures.

That's great if you know you'll be paid back for it, but not so good if you don't. And I know that CURA were genuinely worried that Ancala would pull the plug and allow MG to go bust.

If you are asking someone to lend you £10m, it's only reasonable to supply evidence you're good for it. Of course MG didn't want to do that; MG were simultaneously telling CURA they were close to going bust.

Edited April 16, 2022 by Ringy Rose

[Ringy Rose]

23 hours ago, Bandits said:

A mark up comes into it as the legislation allows them to supply at a mark up. And they have charged a mark up. 

Care to link to that piece of legislation and supply evidence that the MUA make a profit from the reseller agreement?

No. Thought not.

[John Wright]

9 hours ago, Ringy Rose said:

Care to link to that piece of legislation and supply evidence that the MUA make a profit from the reseller agreement?

No. Thought not.

They do make a profit on the execution only deals. It’s in the MUA accounts. Recollection is it’s about £1.8 million.

 

[Bandits]

9 hours ago, Ringy Rose said:

Care to link to that piece of legislation and supply evidence that the MUA make a profit from the reseller agreement?

No. Thought not.

The specific trading arrangements are laid out in several letters referred to in the heavily redacted FOI response. They make a profit on the deals as John Wright clarifies above which are shown in the MUAs accounts. Presumably the FOI request is so heavily redacted that the exact formulas or calculations will never be known. 

[WTF]

10 hours ago, Ringy Rose said:

Were they not? If Manx Gas went bust and left the MUA with a £10m unpaid debt, who do we think would be paying for it.

Hedging is a lot of money. MG say they saved about £2.5m last year through hedging, and MG also say this was about a 10% saving. So the upfront cost of last year's hedging was around £20m, based on MG figures.

That's great if you know you'll be paid back for it, but not so good if you don't. And I know that CURA were genuinely worried that Ancala would pull the plug and allow MG to go bust.

If you are asking someone to lend you £10m, it's only reasonable to supply evidence you're good for it. Of course MG didn't want to do that; MG were simultaneously telling CURA they were close to going bust.

i'm not seeing a big problem,   the MUA use gas themselves in the power station ( allegedly ) so any gas they buy can always be used by themselves , keep supplying MG and the very first time that MG default on a payment fuck them through the courts and buy up their infrastructure at the coroners auction so the MUA gets gas added to its portfolio ,  fuck the unknowable MG owners and shareholders which is maybe where there could be catch,  they will be the greedy great and good of our corrupt little establishment.

[John Wright]

5 minutes ago, WTF said:

i'm not seeing a big problem,   the MUA use gas themselves in the power station ( allegedly ) so any gas they buy can always be used by themselves , keep supplying MG and the very first time that MG default on a payment fuck them through the courts and buy up their infrastructure at the coroners auction so the MUA gets gas added to its portfolio ,  fuck the unknowable MG owners and shareholders which is maybe where there could be catch,  they will be the greedy great and good of our corrupt little establishment.

Given that MG were only buying  about £7million ( at MUA wholesale prices ) a year your figures may be correct with the increased world gas prices. 

Two problems.

MUA/MG invoicing is in arrears and on 30 day terms. So they’ll have had the gas and sold it before MUA are aware of a non payment problem.

It would take a year or more to get judgment, execution, and a coroners sale. In any event, by then MG would have gone into liquidation and MUA would just be an unsecured creditor, and the coroner wouldn’t have any power to sell.

There would have to be emergency nationalisation legislation.

[Bandits]

8 minutes ago, John Wright said:

MUA/MG invoicing is in arrears and on 30 day terms. So they’ll have had the gas and sold it before MUA are aware of a non payment problem.

You are right but 30 days domestic gas usage is peanuts really. If it forward bought MUA would still have the rest to use itself as it won’t have supplied it to Manx Gas to supply to customers yet. As WTF says Manx Gas use a small proportion of what the MUA uses so the downside risk is basically 30 days (give or take) of domestic gas usage supplied. Which won’t be a lot in the overall scheme of things when the MUAs own requirement is so heavy. You’d have thought some sort of margin call or deposit would have fixed that easy enough. 

Edited April 17, 2022 by Bandits
Grammar change

[John Wright]

15 minutes ago, Bandits said:

You are right but 30 days domestic gas usage is peanuts really. The MUA would still have the rest to use itself as it won’t have supplied it to Manx Gas to supply to customers yet. As WTF says Manx Gas use a small proportion of what the MUA uses to the downside risk is basically 30 days (give or take) of domestic gas usage supplied. Which won’t be a lot in the overall scheme of things when the MUAs own requirement is so heavy. You’d have thought some sort of margin call or deposit would have fixed that easy enough. 

I’m sure you’re correct. But assuming MUA bills monthly on 30 day terms, and then there’s a grace period, and they still have to supply to ensure availability to end users, at current wholesale prices it’s £5-7 million plus.

So it’s 60-90 days. And what then?

And it would be standard practice for a small scale ( relatively ) purchaser seeking its wholesaler to hedge on its behalf to provide security or guarantees. What did MG offer?