From Matangi Tonga Magazine Vol. 15, no. 2, June 2000.

The retail price of diesel-generated electricity in Tongatapu will go up from 27 seniti to 33 seniti per unit in July.

The price hike comes about because Shoreline Power Ltd., the generator of electricity, will increase its selling rate of bulk electricity to the Tonga Electric Power Board by four seniti, from 19 to 23 seniti.

Soane Ramanlal of the Shoreline Power Ltd., said that the company could no longer absorb the rising cost of diesel. “The price of diesel has increased from 27 seniti to 50 seniti per litre since we took over the generation of electricity for Tongatapu in December 1998. The price hike has been compounded by a decline in the value of the Tongan Pa’anga against the US dollar since then. These two factors worked against us. The crucial period was between January and May when the price jumped from 40 seniti in January to 50 seniti in May, and we have been running on a deficit,” he said.

Soane pointed out that the new rate of 33 seniti was still lower than the 36 seniti per unit being charged when Shoreline took over the generation of electricity in Tongatapu. “At the time the Asian Development Bank was proposing that the Power Board raise the price to 45 seniti per unit.”

Soane said that Shoreline became involved in power generation because the Chairman of the company, Crown Prince Tupouto‘a,  believed that without cheap electricity, Tonga’s hopes for economic development and raising the standard of living would never become a reality. “So we have invested in the cutting edge of technology, in a carbon based fuel generation plant. This power plant is electronically controlled so that it maximises the efficiency of the engine. It will never operate below a certain level of efficiency. Because of this, we have managed to keep the costs down,” said Soane.

Shoreline so far has invested $14 million on its power plant, which consists of six units, with a full capacity of 8.4 megawatts. Soane said that Tongatapu’s consumption at peak time was 5.6 megawatt, and the rest was reserve, “more than the 1.4 megawatt reserve that was written into our agreement with the Tonga Electric Power Board when we took over.”

Shoreline’s monthly fuel consumption is about 850,000 litres, which is supplied by British Petroleum at a price that is exempted from duty and other government charges.

Soane said that the price increase for electricity was highly regretted by the Chairman of the company. “When the price hit 40 seniti per litre in January, the Chairman decided that we should give it a few more months to see if we could absorb the price rise, but by April the price had risen to 50 seniti and the company could no longer subsidise the cost. So we have been forced by circumstances, which are beyond our control, to raise our selling price of bulk power to the Tonga Electric Power Board,” he said.

New power generator for Vava‘u

Meanwhile, the price of electricity in Vava’u will drop when Shoreline takes over the generation and the distribution of electricity there on July 4. “The price of electricity will be the same in Vava‘u as it is in Tongatapu,” said Soane.

However, he said there was a delay in their operation in Vava’u where they will set up a new $1.9 million power generator and will spend another half a million on an administration facility. “We are still finalising the design and the construction of the power generators in Australia. We are buying it from an American company but they have a manufacturing facility in Australia.

“We were hoping for mid-August this year, but because of this slight delay when we take over in July, we will use their existing facility until our new plant is in place,” he said.