Electricity prices to jump by up to 60% this year

Customers will have to find around £400 extra to pay their bills

Electricity bills on the Isle of Man will increase by up to sixty per cent by July this year.

Customers will have to find around £400 more to pay their bills after Manx Utilities announced it was hiking prices.

The 12 pence increase on the price of a unit of electricity will be introduced in two stages.

The first will come into force on 1 April when it will jump from 22 pence to 28 pence per unit.

A further rise on 1 July will see prices reach 34 pence per unit.

The increase will mean that a domestic customer, using 2,900 kWh per year, will see their annual bill increase from £751 to £942 from April and £1,133 from July.

Manx Utilities said: “Our tariffs currently have different unit rates and so the percentage increases will differ across tariffs, with tariffs with lower unit rates having a larger percentage increase than tariffs with higher unit rates. 

“The standard domestic tariff unit rate will increase by +12 pence per kWh across the two stages, from 22 pence per kWh to 28 pence per kWh from 1 April 2023 (+27 per cent) to 34 pence per kWh from 1 July 2023 (+21 per cent, overall +55 per cent). 

“The standing charge will increase by +9.8 per cent.  A domestic customer using 2,900 kWh per year will see their charges increase from £751 to £942 from April 2023 and then to £1,133 from July 2023, an overall +51 per cent increase due to the smaller increase on the standing charge. 

“Overall the tariff increase (across all tariffs) is equivalent to a +60 per cent tariff increase once the second part of the increase is applied in July 2023.”

Manx Utilities has blamed the cost of wholesale natural gas prices which drive electricity prices in Europe, the UK and the Isle of Man.

These have increased by as much as 500 per cent in the past 18 months and the authority says it is ‘no longer sustainable’ to shield customers from this market volatility by absorbing price rises.

In August last year the Council of Ministers ordered MU to freeze prices until March. You can find out more HERE.

It’s forecasting a deficit of around £50 million anticipated for the current financial year claiming that the cost of wholesale gas will remain around three times the level it was at before the energy crisis.  

Chair Tim Johnston said the decision to increase customers’ bills has not been ‘made lightly’.

He said: “Specialist consultants were brought in to review the business and tariff structure to ensure any increase was appropriate.

“The aim has been to minimise the cost to our customers whilst ensuring Manx Utilities can continue to meet its financial obligations.

“Manx Utilities is not immune from the impacts of the global energy crisis.

“The board has been working hard to shield customers from the cost increases we have been facing over the last two years but we have reached a point where we cannot continue to do so.

“However we will continue to review wholesale energy costs to ensure our tariffs remain as low as practicable.”

He spoke to Rob Pritchard: 

Manx Utilities says it does not currently anticipate it will draw down on the £26 million loan from Treasury which was approved by Tynwald last year.

It says using loans to temporarily reduce tariffs requires higher tariffs in future and delaying the cost increase further would lead to higher costs overall in the future.

Other tariffs – including electricity standing charges and water and sewerage charges – will also increase by September’s rate of inflation 9.8 per cent.

Customers who are worried about electricity bills are being told to contact Manx Utilities for help and support – the freephone number is 0808 1624 115.