E.P.C.defends $350,000 loss
The Electricity Power Corporation has defended a quarterly loss of more than $350,000, saying a move to stop electricity costs from fluctuating each month has dented its bottom line.
Losses of more than $374,000 tala are outlined in the E.P.C.’s quarterly report for July – September 2018 published by the Ministry of Public Enterprises.
The E.P.C.'s Chief Executive Officer, Tologata Tile Tuimaleali’ifano, in a recent interview with the Samoa Observer, said the losses were likely to balloon even further.
“We do expect our losses to be more than $300,000+ given the amount you quoted was from the second to the last quarter and we haven’t seen the figures for the last quarter,” he said.
The C.E.O. says a change to the government-owned utility's pricing structure is behind the loss.
"Each month, the cost of [electricity] fluctuates and we wanted to change that and so we requested to have a fixed rate," he said.
But the C.E.O. says a lag in the time it took for the government to approve the change left them exposed to negative financial consequences.
“And the very first time, we applied [for] 12 months of this financial year and we started to have a fixed rate however the [financial] impact is [caused by] the delayed in the process.
"[The reason] we made a loss is due to the approval process by the Regulator.”
He explained that energy charges are composed of the cost of fuel and diesel.
“[We submitted] the request at the time the cost of the energy charge was cheaper and the approval [came] six months after and when we finally implement[ed] it, the cost of fuel and diesel has increased and we [lost] revenue in the end," he said.
“We have to fork up the difference of the cost.
“And we have been bearing the losses as a result of our efforts to have a fixed rate to cater to the needs of the public.”
He the other that can be resolved from this fixed rate is that eliminates the complaints by the public that while the cost of fuel is decreasing the cost of the tariff has increased.
According to the C.E.O. it is a huge risk for E.P.C. to change to a fixed rate but their main goal to address the concerns of the fluctuating cost of electricity.
He further explained that in their request there would be an annual assessment by the regulator and if E.P.C. has overcharged they will compensate the consumers by decreasing the tariffs and vice versa.
The Samoa Observer sent questions to the Regulator, Lefaoali'i Unutoa Auelua-Fonoti for comments however we have yet to receive a response.