Manx Gas says plea for change of payment terms was to 'aid cash flow'

Energy provider says many issues highlighted in FOI response are now 'resolved'

Manx Gas says it's plea for a change to its payment terms with Manx Utilities was to aid cash flow due to energy prices 'increasing rapidly'. 

The energy provider has responded to a Freedom of Information response which showed it had racked up £9 million of debt to MU earlier this month. 

Information released also showed Manx Gas had cancelled a payment of £2 million just before Christmas and had requested 90 days to pay invoices rather than 30. 

The energy provider says it's been open about the difficulties it's faced over the last six months and the fact it engaged in multiple discussions with government to navigate this period. 

Jo Cox, the chief executive of IEG – the parent company of Manx Gas, said:

"With gas prices increasingly rapidly, and our business operating at a loss, we had to request more than one price increase over the course of the winter. Not all were agreed and so the aim of our engagement with government was to investigate alternatives.

"We made several proposals: firstly hedging our gas purchases, which was not put in place despite providing all management accounts to Manx Utilities, which would normally have been sufficient to reassure a wholesale supplier that Manx Gas was not a credit risk.  

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

"Further to this we made a suggestion that the Isle of Man Government could consider supporting customers with subsidies for their Q1 gas bills, but this was not deemed appropriate by Treasury." 

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

The energy provider says now that regulation is in place, and prices have increased to match the wholesale market value, many of the issues have been resolved. 

Manx Gas declined Manx Radio's request for interview.