Manx Gas Goes Walkabout.

[Celt]

As Mr Karran is asking some questions in Tynwald today about this I thought I'd post some off the things I've been told and see if they tally.

 

What I've been told is that the MEA act as a Buying Agent on behalf off Manx Gas. So on behalf of Manx Gas, the MEA buy at the present market price per Therm and then add on 11p per Therm as a Handling Charge. At a rough estimate 2p per Therm would then be added by Manx Gas as what would seem to be a fair price to cover Manx Gas overheads.

 

So the price Format that would possilbly be is,

 

Present Market Price per Term = 90.325 pence per Term. Source

 

http://www.spectrongroup.com/

 

So, for example, 90.325 + 11p Handling Charge + 2p Manx Gas Overheads = £1.03.325 per Therm.

 

As there are 100,000 units per then you can work out, according to Your unit rate, what Manx Gas is getting back for each Therm purchased.

 

However if the purchase price changes due to any other handling charges the format would still be the same. The Actual price paid might come out in Tynwald today but as Manx Gas is a private company I can't see how the MEA can release the actual fiqure.

 

However, Manx Gas were apparently offered the option of Capped offers and other buying set-ups which the MEA use to try and control price structure but it seems They declined all off these. So it would seem to Me that Manx Gas are not trying to absorb any increase in price but to pass on ALL the price increase on to the Customer.

 

Going back to the Manx Gas change over where it was qouted the £10 Million was being invested, at no cost to the Public, how come that ALL the Gas reduction stations were paid for by the MEA apart from the one at the end of the Main pipeline from Ireland which was paid for by the supplier ?

 

Also why were Stop Valves fitted to the Mains Network so areas/sections could be isolated to burn off the old gas incorperated in that £10 Million? I would have thought they should have been in place already.

 

As Manx Gas qoutes around 22,000 Customers, some would actually be using LPG but We'll take Their fiqure, that breaks down to around £4,545 per Customer. That doen't add up in my opionion.

 

The Managing Director stated on Manx Radio that the Isle of

Man should look at Northern Ireland to get a true idea. So I have and found that Phoenix Gas, who supply around 90,000 Customers, are the Main suppliers and even They are cheaper and have a better Tariff structure to help people and to charge by.

 

http://www.phoenix-natural-gas.com/

 

Even thought Phoenix are cheaper They are still getting grief from OffReg and Belfast Government Dpt's.

 

He also stated that MOST suppliers in the UK are cheaper. Well if this link is right then thats another smokescreen.

 

http://www.npower.com/At_home/Electricity_..._across_UK.html

 

You will need to look at your bill for 01/01/06 to compare prices.

 

If you actually start to look around what offers are available in the UK you will note that Manx Gas actually offer very little if nothing at all to help it's Customers.

 

A sad reflection on this, imo, is that the MEA are getting all hell and asunder thrown at them presently but the MEA seems actually to be trying it's damdest to keep it's energy prices down. If you also look at Manx Telecom, you can at least see ongoing re-investment for the price you pay. And it is, imo, a first class service. The thing I've also found is that Manx Gas in the Isle of Man will try to help you as much as they can but as the Company Directive comes from Jersey, their hands are tied. I think even the employees here are embaressed obout it.

 

However, here's the soloution.

 

The Government Compulsary Purchase the Gas Main Frame, ie: the pipes network. They then sell Gas to the Public, through the MEA, at a fair price, therefore making profit and repaying the Purchase monies. Manx Gas would then have to trade and compete in an Open Market.

 

One major bonus on this would be that the MEA could supply Nobles Hospital and Ballmona Complex with gas at cost or with minimul mark up. This would allow the DHSS the chance to lessen it's running cost and reduce Overspend. They could also charge the Elderly and people who are on lesser incomes and such a lower rate as apart from Manx Gas charging them the highest as it stand at the moment.

 

Example. My Father is 84 yrs old and his gas bill has just risen from £90 to £218. However to Elderly lived through the Blitz, so if Hitler didn't get them, Manx gas won't. However I think Hyperthermia might.

 

I hope this give you an insight as to what my research has thrown up. However when I finish writing up the whole finding I will be sending a copy to EVERY Mhk in Tynwald and all the MLC's. It will also go to the Media, UK and IOM and off course here.

[Hugh Jampton]

Can you expand on Manx Gas's role once the Govt buys the pipework; which goes as far as Crosby. Would there be any need for them to exist? Surely the Govt would be responsible for maintenence and it's expansion.

Perhaps the MEA would have to employ their gasfitters and other workers. The bills could be generated by MEA staff.

This leads up to just one firm again though, isn't the Island too smaller market to carve up. When gas was first being produced from coal each town had it's own gas company.

[LoneWolf]

Celt,

A very good and informative post.

If I could just add to it by clarifying a few points as I understand them.

First is what you have called the handling charge added by MEA. Its actually not added to the cost of gas but is Manx Gas Co share of the transportation and operating costs of the pipeline. These are detailed on p26 of PKF Report. It also states that MEA are subsidising Manx Gas share of the costs by about 17.5 pence per therm.

The second point is the kwh equivalent of one therm. Your gas bill is calculated in kwh not BTU.

There are 100,000 btu to each therm but there are only about 30 kwh (29.3071) to each therm.

Based on the 90.325 pence per therm you have quoted this gives a raw gas cost of 3.08 pence per kwh.

If we add on your 11 pence per therm for transportation and handling we arrive at a cost of 3.457 pence per kwh. I wouldnt know how much Manx Gas Co would take for profit and overheads but lets use your 2 pence per therm as being reasonable. That gives us an all in price of 3.525 pence per kwh.

My gas bill arrived today as it happens and we were charged just over 6.2 pence per kwh.

You can draw your own conclusions about Manx Gas Co operating profits. I know I have.

[LoneWolf]

Celt,

today's news from British Gas and the publication of the European report yesterday reminded me we hadnt seen your work on gas prices yet.

How is it going ?

[LoneWolf]

We are very good at criticising Manx Gas Co so I thought it was time we resurrected this thread.

We were promised a look at some research from Celt which never appeared and I hope we can get a sight of it ... always optimistic in spite of my profession B)

I just thought maybe we should take the opportunity to give Manx Gas some credit for their performance in the most difficult winter the gas industry has ever endured.

Gas has been traded at over £2 / therm this winter. The industry had expected prices to out turn at around 70 p peak. A major difference.

Gas suppliers in the UK have hiked prices, in some cases, by 20 % in response to the market conditions.

Manx Gas Co, by contrast, has held prices down within a reasonable price band.

The consultancy I work for have been mega impressed with Manx Gas. The more so as Manx Gas came into the natural gas market at exactly the time when volatility went bananas. so they havent had the luxury of pre existing long term gas contracts to cushion the volatility.

We are at the end of a long supply chain on the Island and will always pay more than large UK suppliers for our gas. So dont you all think its about time we said well done to a company as well as criticising when they hit us with large price rises.

They have done fantastically well this winter.

Please check out my link to Energy price comparison in the Energy wach update thread if you want the facts.

[hboy]

During My research into Manx gas prices I came across something which I found supprising.

 

I always though and was led to believe that Manx Gas was owned by International Energy Group Ltd who are based in Guernsey and Jersey. However it seems that they were bought out in May 2005 by Babcock and Brown Infrastructure from Downunder.

 

http://www.i-e-g.com/

 

I can't seem to remember anything about this being mentioned in any Local Media and would have thought that as it would directly effect the Public and the Government with regards gas pricing it would have.

 

The good thing about Babcock and Brown is that they seem to have a very good website where you can see how they use and where they earn their monies. It makes a good read.

 

http://www.primeinfrastructure.com.au/repo...x?NavItemID=339

 

Pity I can't find out how much profit Manx Gas made last year. If anyone has any ideas on how to find this out, (legally), I would love to know.

 

Nice to be kept informed as to what is going on with a Monopoly company in the Isle of Man. What background infomation can a Australian based company have about the Manx Publics living costs apart from " Charge what you like and they'll pay it " mentallity.

 

It was in the papers at the time. I certainly read about it (although I do spend time in the Channel islands and I suppose I could have read it there). It was definately reported though.

[LoneWolf]

It was in the papers at the time. I certainly read about it (although I do spend time in the Channel islands and I suppose I could have read it there). It was definately reported though.

 

Celt has also started some research on gas prices in the Island. Ive no doubt he has found it a larger job than he may have first envisaged.

It would be a good time to publish, if he is close to a conclusion, as I think the OFT report will be due out either next week or the week after.