Energy Fiji Limited (EFL) has put forth its proposed adjustments to electricity tariffs, emphasizing their necessity for maintaining investor confidence, ensuring financial sustainability, and accurately representing the costs associated with providing power to both households and businesses. In its Non-Confidential Electricity Tariff Submission, EFL stresses the need for Fiji to foster an environment conducive to new investments, particularly in electricity generation, to meet future energy demands and achieve renewable energy targets.
The utility asserts that establishing a robust regulatory framework is crucial for attracting private investors to Fiji’s electricity generation sector. This framework would not only facilitate opportunities for investment but also instill confidence among potential investors in the energy market. EFL highlighted the risks associated with delays or inconsistencies in tariff reviews, which could lead to uncertainty in project planning and jeopardize upcoming energy projects.
Currently, electricity tariffs in Fiji are reviewed every four years, a practice that EFL describes as vital for both investor assurance and its own financial stability. The utility supports the pricing methodology implemented by the Fijian Competition and Consumer Commission (FCCC), based on the Allowable Revenue model. This model helps determine the revenues that the operator can recover to cover essential costs while providing a fair return on investments.
EFL clarified that the allowable revenue requirements encompass costs that have been prudently incurred, ensuring that investors receive a fair return. The formula accounts for various expenses, including capital costs, depreciation, operational costs, fuel expenses, and payments to independent power producers, while also making deductions for non-tariff revenues.
The utility stressed the importance of regular tariff adjustments to keep pace with inflation and accurately reflect the true costs incurred by operators and investors. The proposal for these adjustments is currently under review by the FCCC, which is set to commence nationwide consultations beginning January 6th.
This initiative reflects EFL’s proactive approach to align its tariff structures with the dynamic energy landscape and economic conditions, potentially leading to a more sustainable and reliable power supply for Fiji in the future.
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