The Competition and Consumer Commission’s recent announcement of new electricity tariff rates has raised significant apprehension among the public, various political factions, and some members of the Cabinet.
Mahendra Reddy, the former Chairperson of the FCCC, voiced concerns regarding the tariff review process in a public statement. He emphasized the necessity for any alterations to fees, charges, or tariff rates in regulated industries to adhere to a transparent and inclusive consultation process. Reddy pointed out that a consultation conducted a year prior is inadequate, given the potential changes in economic, social, and cost structures over that duration.
He further stressed the importance of incorporating the perspectives of consumer watchdogs and government stakeholders, stating that failing to undertake adequate consultations violates the Fiji Competition and Consumer Act of 2010. Additionally, Reddy raised governance issues, noting that dissatisfaction with the tariff changes has been expressed by the government, which holds a majority stake and board representation in the Electricity Fiji Limited (EFL). This raises concerns about whether board members are receiving appropriate policy guidance from relevant ministers.
Reddy also critiqued comments made by the FCCC’s Chief Executive Officer, which hinted at divergent views among Cabinet members regarding the tariff adjustments. He characterized such remarks as politically charged, potentially undermining the regulator’s perceived impartiality.
In addressing the broader implications, Reddy argued that electricity should be regarded as a public good rather than merely a private commodity due to its significant socio-economic ramifications. He proposed that funding for future infrastructure development should not rely disproportionately on current consumers; instead, capital markets could be harnessed, with any negative welfare consequences mitigated through targeted government interventions.
This discourse underlines the critical balance between regulatory frameworks and public interest, highlighting the need for a collaborative approach to energy management and policy-making that prioritizes consumer protection and collective welfare.