THE Fiji Commerce and Employers Federation (FCEF) has provided a detailed written submission to the Fijian Competition and Consumer Commission (FCCC) during an exclusive consultation between FCCC and FCEF members and partners, urging the Commission to set aside the current determination on Energy Fiji Ltd’s (EFL) proposed 34.7 per cent increase in commercial electricity tariffs and restart the assessment process in full.
FCEF’s submission reflects the collective concerns of businesses across multiple sectors, informed by member feedback, economic impact assessments and a review of publicly available financial and operational data. FCEF has called for a transparent, evidence-based regulatory process that complies with statutory requirements and demonstrates that any proposed costs are efficient, necessary and represent the least-cost option for meeting Fiji’s electricity needs.
In its 21-page submission, FCEF outlined several material issues that must be addressed before any tariff adjustment can be considered.
“Our members recognise the need for continued investment in resilient and sustainable electricity infrastructure,” FCEF chief executive officer Edward Bernard said.
“What they are asking for is a process that clearly demonstrates value for consumers, tests whether lower-cost alternatives exist and ensures that businesses are not being asked to fund inefficiencies or decisions they had no role in making.”
Key issues raised in FCEF’ submission
1. Statutory objectives and duties not fulfilled
Both the FCCC Act 2010 and the Electricity Act 2017 impose specific obligations. Under its Act, the Commission is mandated to promote the interests of consumers and ensure that regulated prices are reasonable.
The fact that the initial determination was announced before meaningful stakeholder consultation occurred, despite the tariff application having been lodged several months earlier goes against this. The Federation has stressed that consultation must occur before decisions are reached, not after, and that full disclosure of supporting data is essential for stakeholders to provide informed input.
2. Procedural invalidity and information asymmetry
Genuine consultation for a determination of this magnitude requires meaningful opportunity for influence from the outset, not post-hoc validation of a decision already reached. Although the Commission suspended implementation of the December 19, 2025 determination on December 29–30, 2025 and opened a 21-day consultation in response to public and stakeholder backlash, this retrospective and compressed process – conducted over the Christmas/New Year holiday period without prior disclosure of EFL’s complete application – cannot remedy the fundamental defects of predetermination, apparent bias or evidentiary gaps arising from announcing approval before any stakeholder input.
Furthermore, the quality of consultations conducted has been questioned. Public statements indicate that consultation sessions were characterised as information provision rather than genuine engagement.
3. Financial capacity: Shareholders resources not exhausted
The Federation calls for a thorough review to ensure that shareholder resources are exhausted before consumer extraction is permitted. Based on EFL’s own public records, the submission highlights that EFL has comparatively low gearing levels relative to international utility benchmarks – EFL’s own 2018 Annual Report states: “Throughout the determination of the various sources and levels of investment, EFL will remain mindful that all borrowings to fund capital project must not exceed the gearing level of 45per cent.”
Yet EFL has maintained gearing at 8-26per cent – well below even its own stated threshold. The submission highlights the use of customer security deposits and recent dividend payments and called for shareholder funding options to be fully exhausted before costs are passed on to captive consumers.
4. Strategic failure: Solar and IPP under-deployment FCEF raised concerns about continued reliance on diesel generation, particularly in light of long-term global reductions in renewable energy costs. Consumers are being asked to absorb higher electricity costs partly due to delayed investment in lower-cost renewable energy options. The Federation noted that while global utility-scale solar power costs have fallen by around 85–90 per cent over the past decade, EFL’s solar and wind generation has declined from 3.0 GWh (0.30 per cent of total generation) in 2019 to just 0.8 GWh (0.07 per cent) in 2024, with diesel remaining the dominant source of generation at more than 500 GWh annually.
FCEF argues that earlier investment in renewables could have avoided tens of millions of dollars in cumulative fuel costs over recent years, reducing the revenue now being sought from consumers. FCEF also pointed to examples from other small island economies that have achieved higher renewable penetration and noted that Fiji has made limited use of Independent Power Producers (IPPs) despite having the legal framework in place.
The Federation said competitive procurement from IPPs can help lower costs, attract private capital and test whether proposed investments represent the most efficient and cost-effective options for consumers.
5. Economic context: Cumulative cost crisis
Many businesses are already operating under significant cost pressures arising from recent wage adjustments, tax changes and inflation – 87per cent minimum wage increases, 25per cent corporate tax increases, 39per cent VAT increases, and 17per cent cumulative inflation since 2021.
A further 34.7per cent increase in electricity costs would, for many operations, eliminate already thin margins, reduce investment capacity and place jobs at risk, particularly in energy-intensive and export-oriented sectors.
6. Least-cost alternatives not demonstrated
The Commission has not disclosed any analysis demonstrating that EFL’s proposed capital program represents the least-cost pathway to meet Fiji’s electricity needs.
Available evidence suggests Solar-plus-storage LCOE (Levelised Cost of Electricity) is approximately FJD 0.10-0.15/kWh with 20–25-year equipment life and minimal fuel cost. Diesel generation LCOE is approximately FJD 0.35-0.45/kWh with significant fuel price volatility exposure and ongoing maintenance requirements.
A regulatory process that approves diesel-intensive capital programs without requiring this lifecycle comparison fails to satisfy statutory efficiency requirements. Fiji has been a global leader in climate advocacy.
The Green Climate Fund, Asian Development Bank, World Bank, and bilateral climate programs offer concessional financing specifically for renewable energy transition in Pacific island nations.
The Commission should require demonstration that these concessional options have been fully explored before approving consumer-funded capital recovery at commercial rates.
7. Performance accountability and prior allowances
In 2019, an approximately two per cent tariff increase was awarded to EFL for similar objectives – investment and reliability improvements. The record indicates that EFL did not meet the expected targets associated with that increase. Before approving a new and materially larger increase, the Commission should establish what was delivered against prior commitments. EFL’s tariffs are based on a Regulated Asset Base (RAB) model, which allows for a fair return on planned investment. Consistent underspending against approved capital budgets raises further questions about the execution of prior allowances:
n In 2022, EFL’s Board approved a capital expenditure budget of $145.83million, but only $52.91m was spent.
n In 2024, EFL spent $172m against a budgeted $234m.
Under the tariff methodology, underspending against approved capital expenditure should result in a downward adjustment to tariffs. The Commission has not explained why a massive revenue increase is being granted when EFL has consistently failed to spend the capital allowances already provided through previous tariff determinations, including the 2019 increase.
Recommendation
For the reasons set out in this submission, FCEF strongly recommends that:
(a) FCCC set aside the determination of 19 December 2025 in its entirety/decline EFL’s May 2023 submission.
(b) EFL be provided with an opportunity to make a new submission, ensuring that the specific issues highlighted in this submission is addressed, including full disclosures. Based on this new submission, FCCC institutes a fresh process that involves meaningful and genuine consultation and makes its independent determination. The full submission can be found on our website fcef.com.fj
FCEF CEO Edward Bernard. Picture: FILE
