Regulator invites comments on E.P.C. proposal

The Office of the Regulator (O.O.T.R.) is inviting interested parties to make relevant comments on the proposal by the Electric Power Corporation (E.P.C.) to review multi-year tariffs.

The Multi-Year Tariff Annual Review issue paper by the O.O.T.R. stated that on April 23 this year the E.P.C. sought approval pursuant to Part IV Sections 19 and 20 of the Electricity Act 2010 (“the Act”) for a tariff reform for the financial year 2019/2020.

E.P.C. has reviewed five elements of tariff design and recommended changes for 2019. These are: 

i. the impact of 2018 introduction of fixed charges for the largest consumers – monitored response to changes introduced and proposes change in methodology for establishing fixed and variable cost components.   

- Propose to re-allocate customers in sub-categories (FR1 to FR6) and increase the proportion of Debt + Usage charges recovered via fixed charges. 

ii. Adapting for electric vehicles (no change proposed) – considered options to ready Samoa for EVs.   

iii. Adapting for solar PV – considered options to ready Samoa for rooftop solar PV.  

- Propose to introduce cost-reflective tariffs for solar PV consumers, and set a tariff to be paid to customers exporting energy to the grid. 

iv. Fixed charge coverage – considered options for extending fixed charges to more customers.  

- Propose extending fixed charges to all non-domestic post pay customers with three-phase connections. 

According to the paper, the E.P.C. is advancing a programme to reduce reliance on imported fuels and increase use of renewable resources. 

“In future, this is likely to include arrangements to enable customers to install their own solar PV systems.  There is also the prospect that, like many other countries, Samoa will turn to electric vehicles as an opportunity to replace imported liquid fuels.  

“Electric vehicles have more efficient engines and can make a significant contribution to reducing fuel imports and greenhouse gas emissions, especially if they are powered by an electricity supply with predominantly renewable generation. 

“With these changes in mind, E.P.C. has developed a plan to reform its tariff structure in stages over several years.  The programme of reform is designed to better align prices with underlying costs of supply so that price signals support more efficient use and development of E.P.C network.”

The pace of reform is intended to balance the benefits of early reform with the downsides of rapid change, while also staying in synch with supporting technologies and analysis.  

“E.P.C. is currently in the process of rolling-out smart meters that will provide richer information about electricity demand in Samoa and can be used to support new types of tariffs.   

“E.P.C. intends to reform tariffs in steps over several years, with the pace adjusted based on monitoring changes in behaviour and uptake of new technologies such as solar PV and electric vehicles.”

According to the paper, E.P.C. has provided developed methods leading up to the process of reform. 

 “A long-term tariff package design – high-level design of the tariff package that will be implemented by the end of the reform process and a transition plan – the steps for moving from current tariffs to the long-term tariff package.” 

The objective of the tariff reform is to put in place a structure that will support the objectives of the Electricity Act into the future.  

The two most relevant objectives are to encourage efficient use and investment in meeting Samoa’s energy needs and support affordability. 

More specifically, revised tariffs should enable Samoa to meet its energy needs at lowest cost through encouraging efficient end-use technology choices, encouraging efficient use of energy – how much, and at what time, supporting efficient power system investment (i.e. by not driving unnecessary costs), and continue to provide relief to households most likely to face affordability challenges. 

Public consultations on the proposed tariff reforms are as follows: 

Savai'i  - August 6 at Auala EFKS Hall 9am -12pm; 7th August 2019 at Salelologa, Apita o Pisaga Hall 9am-12pm.  

Upolu - August 13 at the Hotel Millenia at 9am -12pm for village mayors of selected villages; and government ministries, S.O.Es and the business community will be in the afternoon from 12.30-4.30pm.

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