What annoys me about this proposed increase is I suspect MG have not hedged a single therm in future trades and have left themselves wide open to market conditions, and now they want the public to bail them out of it! Gambling the markets without a care for stability for our Island.
MU purchase the gas MG order and MU makes a marginal mark up on these orders, as agreed when Gov did the deals for the pipelines, but if MG fold will MU be contractually left 'holding the baby' for MG's portion of orders? There will surely be a minimum purchase amount in these Irish gas contracts that will need to be paid for.
MU themselves will be better positioned to deal with these increases because I am sure I seen something on their annual report that says they hedge their gas purchases for the power station, but that still means they will be purchasing some gas at these ridiculous rates. No doubt this will have eaten into their profits and maybe more, and will only get worse the longer these prices remain. I assume they are now going to have to run the two power stations on their diesel engines, full chattle, to export to the UK whilst the energy prices are so high to compensate for some of the losses...assuming everyone is happy to turn a blind eye to the smoke for 6 months?
If its eat or heat for some, as previously mentioned, this may be the only way to fend off electricity price hikes.
What I don't want to happen is for MG to be given approval without their accounts being fully inspected and due diligence undertaken. Tynwald need to ask why they have not hedged (if that's the case - I suspect it is given the size of the proposed rise), someone needs to be held accountable. Tynwald need to make sure these price rises are not paying for the other islands in the gas groups ownership, and as soon as the gas spot price returns to more reasonable levels so should the tariffs. And while their at it, it would be good to see if they are spending the whole of their stupidly high standing charge money on the Islands gas network, like they should be, because you never see them doing their own capital schemes or road closures! God knows what their network will be like in 20 years.
Finally, I am happy for the hospital to have reduced gas tariffs, they buy in bulk and look after the majority of the islands vulnerable some time or another.