Consumers urged to actively participate in phase two of the review of FEA tariff rates

11/08/2010 12:27

The Consumer Council of Fiji wishes to urge consumers to make oral and written submissions on how they are affected by the increase in tariff rates. Since the implementation of the June 2010 tariff rates, the Council has been inundated with complaints from confused and frustrated consumers on exorbitant electricity bills. This is a good opportunity for consumers to present their case to the Commerce Commission. From January to July 2010, the Council received 71 complaints against FEA excluding complaints lodged by consumers by phone.

However, consumers will face difficulty in making submission when they cannot easily access the submission made by FEA for an increase in tariff. The Council’s experience in accessing FEA submission from the Commerce Commission has not been a good one. The Commerce Commission could not provide full FEA submission based on the reason of non-disclosure of confidential information. Even a copy of non-confidential information from the submission is not given to the public on request for analysis. The Council fails to understand why FEA related information should be treated confidential when it is a government owned company run on tariffs paid by its citizens? Secondly, being a monopoly there is no danger of losing business secrets to another company because there is “no other” company that will replace FEA?

FEA must be made accountable and transparent and there is no better way by making its initial submission for tariff increase a public document. Without providing full disclosure of information to consumers, public suspicion on FEA operation as noticed through “letters to editor” will remain a contentious issue.

FEA needs to be fully transparent about its costs which not only includes costs associated with the diesel generators but other costs too such as vehicle, salaries/wages, operating and over head.

FEA should also be transparent about its losses, not simply give overall general figure, but provide detailed and itemised losses so that consumers are able to pinpoint where exactly FEA is incurring losses and FEA should also own up their bad decisions which have led to such costs.

According to FEA’s 2009 Annual Report, the organization made a financial profit of $2.4 million after tax in 2009, equivalent to a return on shareholder funds of 0.6%. This result was achieved despite two unplanned contingency events that adversely impacted the financial performance in 2009 by $5.2 million being the flood in January and Cyclone Mick in December. This profit also includes unrealized foreign exchange losses of $5.3 million incurred by FEA as a result of the devaluation of the Fiji dollar in April 2009.  If FEA can make a profit despite all these adversities, then on what basis are the Commerce Commission and FEA claiming that FEA is making substantial losses this year and will be on the verge of being insolvent unless a tariff increase is accorded. Consumers need to fully understand this. 

The Council believes that information on FEA should not be confidential. As a monopoly and Government Corporate entity, how FEA conducts its business should be disclosed to the public and if their justification is correct than they have nothing to worry about.