Manx Gas says advocacy to change payment terms was to ‘help cash flow’

0

Energy supplier says many issues highlighted in JTF response are now ‘resolved’

Manx Gas says its advocacy for a change in its payment terms with Manx Utilities was to help cash flow due to rapidly rising energy prices.

The energy supplier responded to a freedom of information response which showed it ran up a £9m debt to MU earlier this month.

Released information also showed Manx Gas reversed a £2m payment just before Christmas and asked for 90 days to pay the bills instead of 30.

The energy supplier says it has been open about the difficulties it has faced over the past six months and that it has engaged in multiple discussions with the government to get through this period.

Jo Cox, Managing Director of IEG – the parent company of Manx Gas, said:

“With gas prices escalating rapidly and our business operating at a loss, we had to ask for more than one price increase over the winter. Not all were agreed and the purpose of our engagement with the government was therefore to seek alternatives.

“We made several proposals: first, to hedge our gas purchases, which were not put in place despite providing all management accounts to Manx Utilities, which would normally have been enough to reassure a wholesale supplier on the fact that Manx Gas was not a credit risk.

“We also asked if our payment terms could be changed from 30 to 90 days to help our cash flow, but this was not approved by Manx Utilities.

“In addition to this, we have suggested that the Isle of Man Government may consider supporting customers with subsidies for their first quarter gas bills, but this has not been deemed appropriate by the Treasury.”

Manx Gas says it’s important to understand that the problems arose before the current regulatory framework was introduced.

The energy supplier says that now that regulations are in place and prices have risen to match wholesale market value, many issues have been resolved.

Manx Gas declined Manx Radio’s interview request.

Share.

About Author

Comments are closed.