Abraham: How We Monitor The FEA
The Fijian Competition and Consumer Commission (FCCC) yesterday presented their submission to the Parliamentary Standing Committee on Economic Affairs on their role on electricity tariff sector.
Chief executive Joel Abraham said that FCCC ensures that Fijians are better off.
“Our role that is relevant to our work in the electricity sector is to ensure that price regulation of regulated entities is economically justified and applied in an efficient manner,” said Mr Abraham. When queried on whether the development plans for the Fiji Electricity Authority (FEA) in the years to come would affect the rates, he said that it would depend on the situation.
“The investments need to be matched against the output delivery, that is if the investment leads to better technology, renewable energy and disaster mitigation.
“At this point, it’s speculative at best and FCCC won’t be making any speculations until FEA presents their submission,” he added. According to Mr Abraham, FCCC firmly believes in an inclusive approach to regulations and will engage the Fijian public by conducting nation-wide consultations while carrying out review of tariff rates.
“The approach that is used by FCCC provides incentive for the utility to decide on an efficient financing mix, the approach also ensures that the utility assets are depreciated over an extended period therefore the impact on tariff is minimum.
“This approach further ensures that customers pay a tariff that reflects the true cost as well as accommodates incentives.”
Mr Abraham added that the objective of price regulation is to establish prices that strike an appropriate balance enabling the regulated entities to earn fair profits as well as ensuring consumers are not over charged.
In their submission, FCCC highlighted the concessions offered to Fijians. One such concession is the subsidy for the first 100 kilowatt hours of electricity usage per month for all Fijian households with an annual income below $30,000.
Further to this under the 2017/2018 Budget announcement, FCCC submitted that the Fijian Government will continue with its investments to ensure that all Fijians have access to electricity by 2020. “Government is funding the rural electrification projects at around $33.8 million – an increase of around $19 million,” said Mr. Abraham.
“This will cater for some 144 grid extensions by FEA and will benefit more than 2,200 Fijian households and include installation of 76 solar home systems.”