Energy Fiji Limited (EFL) says its proposed electricity tariff adjustments are necessary to maintain investor confidence, ensure financial sustainability, and reflect the true cost of supplying power to homes and businesses.
In its Non-Confidential Electricity Tariff Submission, the utility argued that Fiji must create conditions that encourage new investment — especially in electricity generation — to support future demand and renewable energy targets.
“For private investors to enter Fiji’s electricity generation industry, a robust regulatory regime needs to be established that will provide these investors opportunity as well as the confidence of investing in the energy industry,” the submission states.
EFL warned that if tariff reviews are delayed or inconsistent, project planning becomes uncertain. “In the absence of a regulatory regime to enforce or regulate the regular review of the electricity tariff rate, this can create an environment of uncertainty and can jeopardize pipeline energy projects,” it noted.
Under the current framework, electricity tariffs are reviewed every four years. EFL said this requirement is “important from an investor perspective as well as the financial sustainability of EFL.”
The submission supports the pricing methodology used by the Fijian Competition and Consumer Commission (FCCC), which is based on the Allowable Revenue model. This determines what the operator can recover to cover prudent costs while earning a fair return.
EFL explained: “Allowable revenue requirements — the level of revenues that the regulated entity is allowed to recover — cover prudently incurred costs plus a fair return to the investors.”
The formula used includes capital costs, depreciation, operating costs, fuel expenses, payments to independent power producers, and deductions for non-tariff revenue.
According to EFL, regular tariff adjustments are essential so prices “keep abreast with inflation and reflect the true cost of the operator/investor.”
The proposal is now before FCCC which begins a nationwide consultation from January 6th.
