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Chris Thomas

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Everything posted by Chris Thomas

  1. What lofty ambitions and grandiose schemes do I have? How do you not know in which constituency Marine Drive is? Not knowing that seems contradictory to your normal posting style of "often wrong, but never in doubt".
  2. Thanks for your reply. Three reviews at the moment about NI in Isle of Man: Treasury's NI review to report back to inform 2023 budget, and two GAD actuarial considerations for different dates/periods. GB NI fund is different from IOM one. Starting point was same, legislation for both is similar, but - for instance - i) GB NI fund Investment Account has only around 40 x the value of IOM NI Fund Investment Account so you do maths about per capita value or impact of fund investment income, ii) no annual Treasury grant into IOM one, iii) IOM fund is not invested mostly in UK government debt and iv) investment income from fund is now often used to provide benefits alongside NI contributions and there is intergenerational aspect about retaining investment income in funds for future demographics (that is not just rhetoric, it is fact and policy). IOM NI funds can be used to provide social security, state pensions, health care, administration and other things approved in Tynwald. IOM decides policy in respect of fund, not Westminster, not GAD. IOM and GB/NI national insurance fund investment account policy diverged many years ago. Hope helpful?
  3. It seems you agree that the public is being prepared for drawing down the NI Fund Investment Account for general expenditure more and more?
  4. What a long post! What is the legal and political basis for your view that the Isle of Man NI Fund Investment Account is "simply for contingency"? Our Island situation is different from that in GB and NI. How do you reconcile the fundamental NI "contributory principle" with your suggestion that NI can be used for the public good?
  5. Is that public sector pension fund? If so, around £30 million now, and some of that is effectively missing investment income on contributions which are not invested. Remember too that public sector pension fund is general revenue in any case. Public sector pension situation is much improved since 2016 with the reserve's life extended by several years and the shortfall reduced by 1/3rd.
  6. The petition, and the objections to the original planning application, were on many grounds. My comment was about the legally argued case which was made successfully at the appeal. Alternatives include: Fibre to provide the home service which Sure has piloted in north and central Douglas since 2019 using another approach Use of the mast in Masonic Hall grounds with full planning permission Mast sharing between Sure and Manx Telecom, for instance at Dalton Street Licensed used of Douglas Borough Council street lights Masts on top of existing infrastructure and buildings Planning and telecoms policy around this is not right. There are two Government reports which relate.
  7. Thanks for question. Roger Mexico is correct that there were many projects in Cabinet Office and Council of Ministers in 2020 that Government were more able to put aside after my sacking. For instance economic regulation, 'generational thinking', rates modernization, application of needs and means testing principles, smart services framework, One Public Service etc.. This is a thread on Liverpool dock. Each of these matters could be considered in their own thread, existing or new.
  8. Not wrong, just over-emphasizing the 5G element I feel.
  9. Thanks for comment. Significant harm to residential amenity (General Policy 2 of Strategic Plan) and harm to conservation area character, appearance and views (Environmental Policies 35 and 36, Strategic Policies 4 and 5, and General Policy 2B) were reasons for refusal but another important one was failure to demonstrate strategic national need for the mast which cannot be secured by mast sharing or alternative locations (Infrastructure Policy 3). This was an important element of my Tynwald telecommunications motions in the last 18 months or so. Telecommunications policy, implementation and public funding are flawed. I would hope fibre, mast sharing and existing infrastructure are part of the way ahead. Sure has had a 5G pilot and wrote things like "no prospect of 5G in this area without a development of some kind" but concluded that "there is an urgent need for improved mobile phone coverage in the conservation area". Many residents did petition and object, and two appealed, but I was the only observer at the appeal hearing and the case made by one appellant's lawyers was persuasive.
  10. 5G mast? The mast was not 5G. Planners did not reject. Appeal was successful based on legal arguments.
  11. CURA has published its decision which is "no increase to gas tariffs at this time". See https://www.cura.im/media/1575/information-notice.pdf. More completely CURA's decision is: "22. The Authority’s Decision is that there will be no increase to gas tariffs at this time. A further increase would benefit Manx Gas, but disproportionately negatively impact on the Authority’s other stakeholders, specifically gas consumers and the public interest. The Authority should seek to avoid such asymmetric outcomes where possible. 23. At the time of writing the commodity prices are near an all-time high, however, as pointed out previously, it is unclear if this is a transitory phenomenon or not. In the recent past the market has seen dramatic increases in price but it proved to be short lived. It would be wise for the Authority to maintain a watching brief on it at this time but there is insufficient data available make any reliable predictions as to whether this will be a sustained increase or not. In any event, the current market highs were not the motivation for Manx Gas seeking the review of tariffs at this time. 24. The Authority is working to have more detailed price controls in place in early 2022, the effect of these controls will be to ensure that tariffs are fair. The biggest change that this regulatory framework will bring about will be transparency – all stakeholders will be able to see how the tariff is made up and that the returns being generated by Manx Gas are in line with market norms and are closely monitored. This means that consumers can have confidence that the tariff they pay is reflective of the cost of the gas they consume and the cost of providing it." CURA also helped clarify any remaining misunderstanding about Manx Gas's request in a background note as follows: "4. On 29th November 2021 Manx Gas wrote to the Authority, advising that in light of continuing high commodity prices it was losing “significant profit’” versus the previous year and requesting “a further review from CURA and recommendation of either another price increase or an alternative solution to rectify the significant impact on our business”. 5. It should be noted that this request for a review is in line with the review process set down in the Decision made by the Authority in May. Clear evidence of the criteria being met to trigger a review was provided to the Authority."
  12. For completeness: MT was never in Isle of Man Government ownership, unless I am mistaken. Government/Post Office was offered telephone part of GPO at its launch, but that was nearly 50 years ago; and What costs of gas are nationalised? I think Treasury and MUA seem to charge gas costs and charges to Manx Gas and thus to gas customers. Any dispute is about the size of those costs and charges, and, for instance, how they are charged to MUA customers and to those of Manx Gas.
  13. I cannot see the same thing coming as you believe you see. Telecoms regulation needs to improve too. That is already work in progress for me. For instance why does the monopoly part of telecoms get 8.9% ROCE annually when this rate has been found to be too high in gas and is Government using public funds to over-invest in cabling and masts rather than focusing on forcing infrastructure sharing? Some people even suggestion anti-competitive practices.
  14. My campaigning since 2012 for economic regulation of gas and other natural monopolies - with questions, motions, regulatory contributions and executive government activity - might have contributed too!!!
  15. You might be right, but note that CURA did not actually mention any specific Manx Gas statement in its second press release 20211215_information-notice_gas-articles-clarification.pdf (cura.im), and Manx Gas does not seem to have commented since. Some important elements in the second notice are: "There is also opportunity to trigger additional reviews if market conditions are such that earnings before interest and tax are to increase or decrease by 10% or more from the previous year, which is the basis for the most recent tariff review." CURA would like to clarify that "the purpose of this mechanism is to trigger a review of tariffs, it is not to restore profits to that previous year’s level, nor does it guarantee that an adjustment would be applied. The Authority will consider the impact on all of its stakeholders in any assessment before making a Decision. It has been reported that Manx Gas has a minimum profit level of 10% that was agreed with the Regulator, this is not the case; there is currently no regulated return in place. The Authority is currently consulting on, but has not yet determined a suitable regulatory return for Manx Gas there is therefore no obligation to consider restoring Manx Gas’ profitability to a particular level as part of any tariff review process. The Authority is concerned that inaccurate information in this regard." CURA's "primary concern in the short term is that Manx Gas remains solvent, can support and maintain the network, and can continue to deliver supplies to its customers. The Authority is also considering the social impact on customers as well as the wider implications for the economy such as inflation should prices increase, as part of its review." CURA "accepts that the current situation where Manx Gas is operating with little to no profit is not sustainable in the long term, however it must be acknowledged that gas markets are in the midst of an unprecedented global crisis and therefore the current situation could not be reasonably considered ‘normal' or even as reflective of future regulatory frameworks."
  16. There remains about 30 years in the gas network extension lease I think, but the annual payment has always been a fixed amount including interest and capital, so the only difference now is that this payment is less than half of what it was until recently, Fair points about how it was "sold to us". For instance three.fm in November 2011 put it like this Gas Network Extension Project running to schedule - 3FM Isle of Man (three.fm): "The project which will see natural gas introduced as an alternative to LPG \'towns gas' is progressing to schedule and within budget. The Gas Network Extension Project is being carried out to allow households access to a much wider variety of household appliances, whilst allowing Manx Gas to introduce an 'all Island' heating tariff. For it to happen the MEA had to install 43 km of gas pipe during last winter, with the works teams contending with the heavy snow in December. The first phase will see supplies of natural gas for 9 areas including Ramsey, Peel, Castletown and Port St Mary. For it to happen a survey of over 6,800 households had to happen, this pre conversion work is now complete in Ramsey and the South, and presently taking place in Peel, Kirk Michael and Ballaugh. The conversion works will begin in Ramsey in March of next year." I think Tynwald approved around £23 million at the time, with more than £20 million often cited. Actual figures were provided in appendix 3 in the Gas Committee review report 2019-02-15-chief-ministers-gas-regulatory-review-committee-report-final-approved-1822019.pdf (gov.im). Sorry for the lengthy quote from pages 6 and 7, but you asked : " Network Extension Charges 22. Two separate arrangements were put in place for the funding of the project in its entirety: (i) A normal Government Capital Project between Treasury and MEA, with the full capital value of the project repayable to Treasury over 40 years, following the normal formula of declining payments using Treasury’s standard means for managing the Capital Fund; (ii) An agreement between Manx Gas and MEA, with Manx Gas paying MEA for the entire value of the project (less £1.5m ‘betterment’ as agreed, see para. 14) on a fixed equal payments basis at an agreed rate of interest. 23. Manx Gas sought a fixed interest rate for the life of the agreement in order to give it certainty on its payments over the 40-year term. Manx Gas also sought equal annual payments to avoid the recovery of large front-end loaded payments from customers, which might have led to higher tariffs and had a negative impact on gas usage and growth in the short-term. The interest rate set by Treasury was 6.0%. Manx Gas pays a tariff of £1.2m per annum which effectively recovers the capital costs of the project and interest of 6% over the 40 year expected life of the asset. 24. The total final funded project cost, including project management, design, payments for wayleaves, gas pipeline materials, construction and testing, Above Ground Installations (AGIs), and conversion of customers to natural gas from LPG/air was £20,055,249. 25. Of this, £12,113,141 was for the actual physical infrastructure in the ground (the pipelines themselves and AGIs and associated works) and the remaining £7,942,108 for the conversion project (carried out by Manx Gas but funded by MEA). 26. Manx Gas has an agreement with Manx Utilities to pay back £10,613,141, being the cost of the pipelines less £1.5m ‘betterment’ (see above), at 6.0% over 40 years for the pipelines (equating to £705,774 p.a. – the "Offtake Charge"). This would rise to £805,524 p.a. should the whole of the additional incremental capacity associated with ‘betterment’ be utilised in full at any point (by any user). At the moment Manx Gas use about half of the initial ‘unimproved’ capacity in the system (i.e. the amount of capacity that would have been available in the original 180mm pipeline design). 27. Manx Gas also has an agreement with Manx Utilities to pay back the £7,942,108 associated with the conversion costs, also at 6.0% over 40 years (equating to £528,150 p.a. – the "DSO Charge"). Payments made by Manx Gas to Manx Utilities in respect of these charges are paid to Treasury on a pass-through basis. Manx Gas effectively pays a fixed interest rate. 28. Finally, as part of the Offtake Charge, Manx Gas also pays on a cost pass through basis for any annual wayleaves that were not capitalised as part of the project, i.e. where landowners elected to take annual wayleaves payments rather than a single one-off payment.
  17. CoMin was wrong to give up on proper gas regulation in 2013 (economic regulation) and to require OFT, DED and Treasury to sign bad 2015 Gas Agreement (voluntary regulation). I agree, but the consultants at the time did not seem to agree (OXERA). Nearly all Ministers who stayed in politics subsequently claimed they were against it at the time, but I only ever saw evidence of Juan Watterson's objections. I argued against this bad agreement as OFT Vice Chair and resigned from board when it was signed in April 2015. Neither OFT nor Treasury got their regulatory responsibilities and activity right when the 2015 agreement applied. That was shown clearly by the consultants engaged in the procurement I led for the Gas Regulatory Committee review. In June 2020 Tynwald forced government to give notice. OFT could also have done more at the end of the agreement, but didn't; DoI could also have done much more, but was hardly aware of the powers it had, these powers being those subsequently transferred to CURA, including with some enhancements through legal amendment. Manx Gas did push to the limit the possibilities of the situation they were in and probably earned around 13% return on capital employed per year using standard regulatory and accounting methodology during the life of the 2015 agreement, although OFT and Treasury were of the view they were capping the return at 9.99% per year. Treasury, and thus Government, has also charged gas customers more for infrastructure than electricity customers, for instance. Manx Gas was also forced to subsidize mostly rural gas consumers at the expense of Douglas customers during the last decade after the establishment of an all-round tariff. But I prefer the Nelson Mandela or Abraham Lincoln approach to the past - truth and reconciliation and moving on in a better way - to the approach you and many others seem to prefer, i.e. sometimes going back decades to past wrongs on which they dwell. Thanks for comments.
  18. "£30 mil for that western link" - you will have to help me more. The capital costs of the Bord Gais extension to the Island will no longer be payable from September 2023, and the on-Island gas network extension cost around £14 million (in addition there was about £5 million financed for conversion to natural gas), from memory.
  19. Profiteering? In the last decade more accurately they were just regulated using a bad approach. The rebate for 2020 and 2021 will be paid. The persistent reduction of the lease interest cost becomes just another cost from 1/1/2022 and it will be handled by Manx Gas and CURA as that. Honour? Treating bygones as bygones is often helpful for a better future!
  20. Gas consumers will receive the entire benefit of the lease interest rate reduction. That is agreed. There is no guarantee of 10% return on capital employed for Manx Gas. CURA will fix gas prices in relation to a much lower return on capital employed by Manx Gas. This reduction in costs incurred by Manx Gas allows this one-off rebate and continuing lower gas tariffs than would otherwise have been the case.
  21. Fair question. The press release sentence is slightly ambiguous - "The arrangement has been established following a decision to reduce the amount Manx Gas pays Manx Utilities each year in relation to infrastructure payments, with £1.4m savings being passed on to consumers in full" - in that the £1.4 million saving is the total of the saving from two complete calendar years (2020 and 2021) at around £700,000 each year.
  22. Chief negotiator for Isle of Man people and public service!!!? Just think what I could have achieved negotiating with Peel Ports and previous Steam Packet owners if I got all that out of Manx Gas and Ancala
  23. Yes. All agreed and Government and Manx Gas issued a joint press release Isle of Man Government - Rebate for gas customers following loan adjustment by Isle of Man Government. 2020/2021 rebate of £58 will be paid with bills from February 2022 onwards. Manx Gas's accounting year starts on 1st January and from this New Year Manx Gas costs will have been reduced by around £700,000 per year because of this particular lease interest rate reduction. CURA will see those reduced costs in Manx Gas accounts and will take them into account when it fixes price cap or regulates otherwise.
  24. More completely Manx Gas is an Isle of Man public gas supplier, and is the major part of a group that supplies natural gas here, and LPG here and in the Channel Islands. Its shareholder is an infrastructure investor, Ancala Partners. I would contend that the real narrative for gas regulation since 2017 is not at all what you suggest and is a success for public policy here. For instance in recent years: Banded standing charges were abolished; Statutory economic regulation of the gas natural monopoly has been introduced and the remit of the Communications Commission has been extended as it became the Communications and Utilities Regulatory Authority, the Island's professional and de-politicized economic regulator; The return on capital employed in wholesale gas provision seems likely to perhaps halve from the guaranteed 9.99% per year which was prescribed in the flawed 2015 gas agreement until 2020, and the accounting for intragroup activity and investments is being brought into line with standard practices; and From 1st January 2020 the loan interest rate on the lease for Manx Gas is now in line with state loans for other utilities and infrastructure.
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