E.P.C. Chief coy on price hike fears

By Joyetter Feagaimaali’i-Luamanu 25 July 2017, 12:00AM

The Chief Executive Officer of Electric Power Corporation, Tologatā Tile Tuimalealiifano has refused to confirm or deny reports that electricity prices could soon increase.

The fears about an increase have surfaced following public consultations – including with the business community – about a new “Multi-year Tariff Proposal 2017/2018” from the Corporation.

Little is known about what this entails. During a recent Chamber of Commerce meeting, the business community was informed that the proposal could result in an increase in tariff rates and a change to tier structure. 

 “The objectives of the new proposed rates were for the tariff to be affordable for the public, to cover the Electric Power Corporation operating and capital costs and to meet legislative requirements for Public Bodies,” a statement from the Chamber said. 

This has led to concerns from members of the public who say nation cannot afford another increase to the cost of electricity.

Contacted for a comment, Tologata said the process is yet to be completed.

 “Unfortunately it is pretty premature to make a statement at this stage as we are now going through the approval process by the Office of the Regulator,” he said. 

“Part of the process is public consultation as per our meeting with the Chamber of Commerce."

“After the process is completed and the Regulator makes its decision and endorsed by Cabinet, only then the new rates will be officially released.”

Pressed if the proposal means electricity prices will increase, Tologata was coy.

“The consultations are still continuing,” he said.

He further asked the Samoa Observer to “wait until the approving process is completed” to limit any confusion to members of the public. 

He also noted that the prices “may go down instead of up if Government decided to remove 7% ROE [Return on Equity] obligation which is not included in the current tariff.” 

Last month during submission of the E.P.C.’s Annual Report for approval, Members of Parliament raised several contentious issues.

As reported earlier  one of the issues discussed by the Parliamentary Committee was about the huge reduction of the cost of electricity as approved by Cabinet.  

The E.P.C. responded in their report submitted to Parliament that it is unable to achieve both targets of meeting its obligation of 7% R.O.E. under Public Finance Management Act 2001, and at the same time, reduce the cost of electricity for the country.  

“If the Corporation has to meet its 7% (R.O.E.) obligation the cost of electricity should be increased."

“However for the financial year (2016-2017), Cabinet approved reduction in electricity tariff effective 1st August 2016.”

Prime Minister Tuilaepa Sa’ilele Malielegaoi highlighted the importance of electricity.

“If the cost of electricity is reduced, the whole country and all sectors will benefit,” he said firmly.

By Joyetter Feagaimaali’i-Luamanu 25 July 2017, 12:00AM
Samoa Observer

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