Government steps in to cover electricity price increase [1]
Tuesday, November 5, 2019 - 19:27. Updated on Tuesday, November 5, 2019 - 21:48.
Tonga's electricity consumers have been spared the recent electricity price increase as the government is stepping in to cover the increased charges over the next few months.
The price of electricity increased from $0.7990 to $0.8316 per kWh, starting on 1 November, as approved by the Electricity Commission.
The Prime Minister, Hon Dr Pohiva Tu’i’onetoa, confirmed in a media statement today, 5 November, that after meeting with Tonga Power Ltd. on 4 November to clarify the sudden increase in price, the decision was made for government to cover the extra cost in November and December. He estimated this will cost government $360,000 in order to hold the tariff for two months while an investigation is carried out. Tonga Power Ltd. is a public enterprise.
Today's statement said the Prime Minister “is also the Minister of Public Enterprises, the Minister of Finance and CEO of the Ministry of Public Enterprises.”
The Prime Minister is also a former auditor.
He has directed that: “Tonga Power Ltd. is to engage Price Waterhouse Cooper to carry out an independent audit of the merit of the tariff structure, the validity of numbers in the elements of tariff structure, and the logic or otherwise of the tariff increase.”
The Prime Minister claimed that: “The consumers will not bear these tariff costs, nor the costs of Price Waterhouse Cooper.”
He also directed Tonga Power Ltd to continue to charge all customers the old tariff, not the new electricity price.
The Prime Minister's Office is trying to understand why Tonga's renewable energy campaign has not brought down electricity prices.
The PM said it was anticipated that the audit “will bring a clear understanding as to the impact of the Renewal [sic] Energy Campaign which was intended to bring down the price of electricity instead of increase the tariff.”
He expected the Renewable Energy Campaign to bring down the price of electricity by 20 - 30%, once Tonga reached its target of 50% renewable energy production.
“If this exercise will not bring a clear answer to this claim, this government will have to redesign this strategy immediately, because we are closing [sic] to the achievement of this 50% Renewable Energy Target.”
Meanwhile, the Tongan government is already subsidizing the first 100kWh consumed by all residential customers at a fixed rate of 70 seniti per kWh.