Electricity Price Hike

[Happier diner]

21 minutes ago, asitis said:

And once again no one is held accountable and we wonder why stuff like this keeps happening !

What the Isle of Man taxpayers and residents can't afford is our Government !

That's a fair enough comment. Trouble is all the people around at the time are long gone now.

[Andy Onchan]

46 minutes ago, Happier diner said:

The price has always been about paying off the debts. It's basic accounting. You have to pay back the capital cost of an asset as well as the cost of operating it. How else could it work? 

I thought they were paying just the interest on the loan?

[Happier diner]

15 minutes ago, Andy Onchan said:

I thought they were paying just the interest on the loan?

Maybe. Who knows. Same thing applies. You have to sell your product at a rate that allows you to pay off the loan that you got to pay for your assets, including interest charges.

As I see it, the MUA were not quite doing this before the fuel crisis. Nearly, but not quite. Then the gas price went up and suddenly the whole thing becomes unsustainable because the organisation suddenly cant afford to buy its raw material. 

[Non-Believer]

Worth thinking about? With the exception of external influence, such as Ukraine, the vast majority of the Island's current problems have been created in-house, by our own politicians and Govt employees on a completely unaccountable basis.

[Andy Onchan]

23 minutes ago, Happier diner said:

Maybe. Who knows. Same thing applies. You have to sell your product at a rate that allows you to pay off the loan that you got to pay for your assets, including interest charges.

As I see it, the MUA were not quite doing this before the fuel crisis. Nearly, but not quite. Then the gas price went up and suddenly the whole thing becomes unsustainable because the organisation suddenly cant afford to buy its raw material. 

But there is a difference. Interest payments will go on ad infinitum until Treasury say stop (which is very unlikely). Repaying capital as well suggests payments will continue until the amount borrowed is fully repaid and future payments fall away thereby improving cashflow. As it stands at the moment that ain't gonna happen. 

[Happier diner]

8 minutes ago, Andy Onchan said:

But there is a difference. Interest payments will go on ad infinitum until Treasury say stop (which is very unlikely). Repaying capital as well suggests payments will continue until the amount borrowed is fully repaid and future payments fall away thereby improving cashflow. As it stands at the moment that ain't gonna happen. 

To some extent yes. They dont only owe treasury do they. I thought they owed the bank a few hundred million.

[Gladys]

9 minutes ago, Andy Onchan said:

But there is a difference. Interest payments will go on ad infinitum until Treasury say stop (which is very unlikely). Repaying capital as well suggests payments will continue until the amount borrowed is fully repaid and future payments fall away thereby improving cashflow. As it stands at the moment that ain't gonna happen. 

And repaying the capital reduces the interest payable, you would think. 

[Happier diner]

Just now, Gladys said:

And repaying the capital reduces the interest payable, you would think. 

Indeed. But where will they get the money from. Didnt government give them £95m a few years ago to try and do that.

[WTF]

1 hour ago, Happier diner said:

The price has always been about paying off the debts. It's basic accounting. You have to pay back the capital cost of an asset as well as the cost of operating it. How else could it work? 

well you could charge a little more than necessary to begin with so when something expensive comes along you have some capital saved up to fund it with.

[Happier diner]

6 minutes ago, WTF said:

well you could charge a little more than necessary to begin with so when something expensive comes along you have some capital saved up to fund it with.

That was the plan wasnt it? Government refused to allow them to do it.

[Andy Onchan]

16 minutes ago, Happier diner said:

Indeed. But where will they get the money from. Didnt government give them £95m a few years ago to try and do that.

The GMT, where else?

[Andy Onchan]

19 minutes ago, Happier diner said:

To some extent yes. They dont only owe treasury do they. I thought they owed the bank a few hundred million.

Only Treasury AFAIK.

[cissolt]

2 hours ago, Happier diner said:

The price has always been about paying off the debts. It's basic accounting. You have to pay back the capital cost of an asset as well as the cost of operating it. How else could it work? 

If you scroll back a few pages you said it was due to the current gas price.  Have you changed your mind?  Or realised that this is a debt repayment due to poor decision making?

[Banker]

The government debt is listed in accounts 

Total amounts 

The Isle of Man Treasury Bonds comprise two Bonds:
i. £75 million nominal value at 5.625% per annum with a maturity date of 29 March 2030 to fund water infrastructure improvements; and
ii. £185 million nominal value at 5.375% per annum with a maturity date of 14 August 2034 to fund electricity infrastructure improvements.
The amount of £263.0 million (2021: £262.8 million) includes unpaid but accrued interest to 31 March 2022 of £6.2 million (2021: £6.3 million).
Interest payable on the Consolidated Loans Fund is at a variable interest rate as determined annually by Isle of Man Government Treasury.
For the year under review the interest rate was set at 2.0% for new advances (2020-21: 2.0%) and 1.7% for previous advances which were refinanced through a £400 million Government Bond issue (2020-21: 2.0%).

so fairly hefty interest payments c£19.5m 21/22

Edited March 25, 2023 by Banker

[Andy Onchan]

12 minutes ago, Banker said:

so fairly hefty interest payments c£19.5m 21/22

And rising for 22/23 and probably for 23/24 as well.