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MEA Annual Report & Accounts 2007/08 9 October 2008

The Manx Electricity Authority recorded a turnover of £59.8 million for 2007/08, up 4.4% on the previous year, and saw the amount of Government Revenue Grants required for the year reduced by £3.4 million. The overall deficit for the year was £7.9 million, compared with a £14.3 million in 2006/07.

Income from exported electricity for 2007/08 contributed £5.3 million towards the turnover, up from £3.3 million the previous year, while operating costs were £55.8 million, down from £62.8 million in 2006/07.

The MEA Annual Report and Accounts, which will be laid before Tynwald at this month’s sitting, follow the approval and publishing late last year of accounts for 2003/04, 2004/05, 2005/06 and 2006/07.

Eddie Lowey MLC was acting Chairman at the year end. In his statement he says:

“The past few years have been a period of transition within the Authority as long-running accounting disputes have been settled, a new Board appointed and the staff of the Authority successfully adapting to change in order to make gains in efficiency to meet a strict financial recovery plan.
“In July 2005, Tynwald approved revenue support grants for the Authority based on a 30-year financial model and it is against this model that the Board has monitored expenditure and income. “I can report that the actions taken have resulted in the Authority requiring £16 million less in revenue grants (since 2005), originally approved by Tynwald, and I consider this to be a major achievement, even though the Board acknowledges that there is still more work to be done before the Authority returns to self-funding status.”

Mr Lowey added:

“I would like to thank my colleagues on the Board for their support, particularly the previous Chairman, Eddie Teare MHK. However, the success of the Board’s policies could not have been achieved without the dedication and commitment of every member of staff, whom I wish to thank for the individual part that they have played in advancing the Authority’s financial recovery thus far.”

Along with the rest of the world, the MEA faced massive rises in fuel costs during 2007/08, with the price of oil more than doubling to $140 per barrel. Forward purchasing policies already in place allowed the Authority to maintain fuel costs within budget and avoid the need to set a fuel cost adjustment during the year. However, should oil and gas prices remain high, it is unrealistic to expect purchasing policies to enable the Authority to keep fuel costs within budget.

This year saw the culmination of Government’s commitment to light the fibre optic cable laid with the UK-Isle of Man interconnector in 2000, thus providing additional off-Island telecommunication services in support of Government’s policy to promote e-business. To facilitate this move, the Authority established a new subsidiary – e-llan Communications Ltd – to undertake its commercial telecommunications business.

High plant reliability and availability performance enabled the Authority to achieve record generation volumes, which both met the Island’s demand for electricity and allowed for the surplus to be exported to the UK.

Chief Executive Ashton Lewis commented:

“The cost of supply of electricity to the Island’s network is minimised by ensuring that the most economical generation mix is used at any time and this includes electricity supplied by the Energy from Waste plant and the hydro-electric station at Sulby.
“These latter generating sources contributed approximately 5% of the total electricity generation during 2007/08 – without consuming fossil fuels. The Energy From Waste plant produced 4% of the Island’s overall demand, and the production volume mix for the remainder consisted of 97% gas, 2% diesel, from the Pulrose and Peel stations, and 1% hydro-electric.”

The Authority’s proactive approach to health and safety issues saw a 67% reduction in the number of lost-time accidents involving staff, compared with the previous year, and a 66% reduction in the number of incidents involving damage to an Authority vehicle, while safety awareness presentations and ‘Dial Before You Dig’ seminars were delivered to construction contractors.

The Authority continues to strengthen its commitment to the environment and the community. The carbon dioxide intensity of its electricity generation per unit (kWh) has been reduced by 40% since 1990, resulting in a carbon intensity of our electrical supply of 0.43kg of carbon dioxide/kWH, compared with 0.52kg of carbon dioxide/kWh from the UK national grid. Meanwhile, 2007/08 saw the Authority’s environmental policy reviewed, as part of the wider corporate governance process, and included a review of flood risk assessment and waste management arrangements.

The Authority also worked with the Department of Local Government and the Environment, the Office of Fair Trading and the Department of Trade and Industry to deliver an energy strategy to support the Government Energy Policy, which encompasses issues such as renewable generation, green tariffs and grant aid for energy efficiency.

Community initiatives included a presence at both of the Island’s agricultural shows and a major involvement with the four-day Crucial Crew Exercise run by the Emergency Services for primary school children. The Authority is also progressing a Children’s Safety Education Training Programme for primary schools, with the aim of assisting the Department of Education with safety awareness for children.

For further information: Alison Cottier, PA & PR Manager Tel: 687798

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