Manx Gas has announced a new billing structure for central heating customers.

The company says that the new system will be based on the amount of gas consumed and comes into effect on January 1 2016.

Customers will receive a leaflet explaining the changes and everyone affected will be contacted by letter, detailing which standing charge band they are in.

Managing director Tony Nicholls says: 'Currently Manx Gas recovers less than 16 per cent of the cost of operating the network through the existing standing charge. The balance is paid for in the gas tariff, which is a problem for us and unhelpful for customers, especially in cold spells as it leads to ‘lumpier’ bills.

'The revised billing structure introduces a new banded standing charge mechanism based on the volume of gas that a central heating customer consumes. This change will go some way towards re-balancing the situation and under the new mechanism
we will be collecting closer to 60 per cent of our fixed costs through the standing charge.'

He said customers will see an increase in the standing charge but a decrease in the cost per unit of gas. Manx Gas says the most vulnerable in society will be protected by the tariff remaining unchanged for those using under 5000 kwh.

In May, it was announced that the gas supply network would be regulated for the first time. The government said this would save the island's consumers more than ?2million over four years.

The OFT has reviewed the new billing structure and declared it 'revenue neutral'.

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