Electricity users to shoulder hefty bill
More than half a million tala in licensing fees imposed by the Office of the Regulator for the Electric Power Corporation (E.P.C.) will be paid for by members of the public.
So revealed E.P.C.’s General Manager, Tologatā Tile Tuimaleali’ifano, during an interview with the Weekend Observer.
But the Regulator, Lefaoali’i Unutoa Auelua-Fonoti, says the license fees come from 0.5 per cent of gross revenue from electricity sales.
According to documents obtained by the Samoa Observer, the Office of the Regulator’s fee for the E.P.C. this year alone is $691,500.
“This is the first time E.P.C. will pay any licensing fees to the Regulator,” Tologata said.
“So for this year, which is a first, we are trying to determine whether this is a significant amount or whether the funds are not enough, because these funds are for the Regulator’s operation.
“So we are looking at consulting with the Regulator if they would agree to lower their fees. This is the first time we have been charged by the Regulator under the statute.”
According to Tologatā, everyone will be affected by the licensing fees.
It was put to the C.E.O. that under the Electricity Fees Regulations, it is clear the licensing fees are 0.5 per cent of gross revenue collected by E.P.C.
“That is true, however these are licensing fees and we will pay one way or another and it doesn’t necessarily come from the profit.
“This is an expense and it will be passed on to the consumers,” said Tologatā.
“We have a Regulator that regulates telecommunications; electricity or E.P.C. and maybe in the future they will regulate the Water Authority.
“The idea behind it is for us, the regulated offices, to share cost because it is expensive to have a Regulator for each of the outlets.
“Again, we are looking at these fees whether it’s significant or not; because the said fees may only cover three salaries and who knows where the remaining funds will go to,” said Tologatā.
Lefaoali’i said the license fees were passed through cost which was outlined in the Annual Review of the Electricity Tariff.
“To clarify the impact of the license fees on the tariff (usage charge) is insignificant and has not caused an alarming change in the overall tariff as purported.
“The Electricity Fees Regulations 2017 was signed by the Head of State on 20th March, 2017.
“This regulation sets out the fees charged by the Office of the Regulator as per the Act.
“Same applications of license fees are applied to other Regulated Services like Telecommunications and Broadcasting as per requirements of their respective Acts.”
Asked whether the Regulator Office will consider negotiating the E.P.C.’s licensing fees, Lefaoali’i said: “For the electricity sector, my office can only charge license fees that are set out in the Electricity Fees Regulations 2017 (Regulations), this is the same case as the telecommunications sector.
“These fees, and in this case the Electricity Fees were established through detailed consideration, benchmarking exercise, analysis and was also consulted with the relevant stakeholders; as a result the (0.5 per cent of gross revenue) was established; and by international standards it is low,” she said.
“We cannot over charge or undercharge fees on a whim and especially if it is not in accordance with the law.
“We also bring to attention that we continuously try to work with the E.P.C. in ensuring that the cost of electricity is affordable, and such initiatives include the Office of the Regulator meticulously scrutinizing their Power Purchase Agreements and the Feed in Tariffs that they utilize in connection with the supply of electricity by Independent Power Producers,” explained the Regulator.
She added that pursuant to the Electricity Act 2010, Section 54 allows for the Head of State to set Regulations for license fees under the Electricity Sector.
She reiterated these fees have been consulted with the Independent Power Producers (I.P.P.) as well as E.P.C. as required before the Regulations came into force.
Regarding the amount of the fees, Lefaoali’i, said she could not confirm the amount because they did not have the necessary financial information that was needed from E.P.C. to calculate the relevant fees.
“The purpose of these fees is to cover operations in my office including carrying out Tariff Review, Public Consultations, monitoring and enforcement, Research and Development and regulating the Electricity Sector.
“My office can only charge fees that are set out in the Regulations, we cannot over charge or undercharge fees that contradict what has been set out by law.”