Meteorological office asked to explain Monasavu rainfall

20/11/2008 12:04

The Consumer Council of Fiji is alarmed at the manner the Fiji Electricity Authority (FEA) had the government approve the implementation of the sought after fuel surcharge rate of 5.53 cents per kilowatt. The Council believes that FEA created a negative hype about the electricity supply in the country from the receipt of poor rainfall at the Monasavu dam, resulting in the increased usage of diesel generated electricity and alleged escalating costs to FEA. Now we learn that nature really didn’t pose the reason for the increase in the fuel surcharge rate from 2.83c/KW to 5.53c/KW. Rather, FEA needed to somehow generate money to fund the construction of the Nadarivatu dam. While the Council is not against the construction of the dam, as it would mean electricity generation from a renewable source, it cannot understand why the FEA CEO Mr Hasmukh Patel was not honest in stating the reason for wanting an increased fuel surcharge rate. Consumers would surely have understood FEA better in this regard.

Given the approval in the implementation of the new fuel surcharge rate from 27th November 2007, the Council makes the following arguments:

Implications on consumers

  • Although consumers using 75KW and less of the electricity are exempted, they will nonetheless feel the impact of the fuel surcharge through the passing down of the additional costs incurred to businesses , industries and service providers. Other rresidential customers using more electricity would see themselves paying twice the amount on fuel surcharge due to the trickle down effect factor that would drive the prices of goods and services upwards.  
  • Consumers are paying more than they can afford to. They are paying for subsidy of fuel to FEA through their taxes, payment of fuel surcharge itself, tariff rate and VAT charge.

Re-calculation of fuel surcharge

At the time the Commerce Commission had approved the fuel surcharge rate of 5.53c/KW, the global fuel price was high. The Council therefore believes that the fuel surcharge rate required re-calculation to better reflect the current lower prices of fuel in the global market.

Monasavu rainfall figures

Mr Patel has constantly stated poor rainfall at the dam, affecting its water level and ability to generate higher percentage of electricity. However, the Monasavu rainfall figures reported by the Fiji Meteorological Office contradict Mr Patel’s description of rainfall. It is therefore important that the Fiji meteorological office provides and explanation to consumers as to who is correct in their figures – FEA or the Met office. The credibility of the national weather office is at stake if the figures quoted by FEA stand correct as compared to the publicized reports pasted on the FMO website.

FEA has been able to work up a fear of a looming energy crisis among the government of the day and the people of Fiji by simply blaming nature. However, no one bothered to cross-check the figures of FEA against that reported by the national weather office? The honesty of FEA therefore is questionable.

Self regulation an issue

The continuity of the fuel surcharge has two conditions which are: the price at which FEA purchases fuel and the volume of fuel usage. The concern of the Council is that FEA being a self-regulatory authority is left largely to run its own affairs. The issue of self-regulation must be removed purely to instill good governance. Presently, under its regulation FEA approves electricians and electrical products and services amongst other approvals to be sought by them. The Council believes that FEA should not be given the judge and the jury responsibility.

The Council further believes that Fiji should review FEA and develop an energy policy to better address its energy issues. FEA being a monopoly should not be left to decide what is good or bad for Fiji in terms of the supply of energy to the nation. The government should shoulder this responsibility and not FEA.