FCCC told to scrap electricity tariff decision, restart review

The Fiji Commerce and Employers Federation (FCEF) has called on the Fiji Competition and Consumer Commission (FCCC) to set aside its December 19 electricity tariff determination and restart the regulatory review process, warning the decision is procedurally flawed and risks worsening Fiji’s cost-of-living crisis.

The call was made during a closed-door consultation yesterday at the Civic Centre in Suva between FCEF members, Energy Fiji Limited (EFL) and the FCCC, where the Federation formally presented its written submission objecting to the approved tariff increase.

FCEF said the determination approving EFL’s application could not stand on procedural, statutory and economic grounds, arguing it was made without genuine consultation and based on incomplete and undisclosed information.

‘Fundamentally flawed’

FCEF president Eldon Eastgate said the proposed increase unfairly shifts the burden of EFL’s investment decisions onto businesses and consumers already under severe financial pressure.

“FCEF submits that the December 19 tariff determination is fundamentally flawed — procedurally, economically and legally,” Mr Eastgate said.

“It was made without genuine consultation and relies on incomplete information that prevents businesses and consumers from properly assessing the basis of a proposed 34.7 per cent increase.”

He questioned EFL’s claims of an urgent funding crisis, noting the company paid $40.7 million in dividends in 2023 despite recording a $24.8 million loss, holds more than $52 million in customer security deposits, and has low debt levels providing an estimated $257 million in untapped borrowing capacity.

Call to overturn or reject tariff application

FCEF said the FCCC must either set aside the determination and restart the process or reject EFL’s tariff application entirely, arguing that conditional approvals or minor adjustments would not fix what it described as “fatal deficiencies”.

Seven critical failures identified

The Federation outlined seven major failures in the decision, including:

• Lack of transparency and consultation, with the determination announced before public input
• Failure to require shareholder funding before passing costs to consumers
• No reconciliation of the $1.2 billion raised from partial privatisation in 2018
• Unverified demand growth forecasts
• Failure to demonstrate that costs are efficient and least-cost, as required by law
• Continued reliance on expensive diesel generation despite falling renewable costs
• No independent technical or financial verification of investment plans

FCEF said diesel remained the dominant power source in 2024, resulting in a $211 million fuel bill, while solar and wind generation had declined instead of expanded.

Economic pressure warning

FCEF warned that a steep increase in electricity tariffs would ripple through the economy, adding pressure on businesses already dealing with higher minimum wages, increased VAT, corporate tax hikes and inflation.

“A further increase will be passed through supply chains, raising prices for all consumers and threatening jobs,” the Federation said.

Not against investment, but process

FCEF chief executive Edward Bernard stressed the Federation supports investment in power infrastructure but not through what it described as a flawed process.

“Our objection is not to investment,” Mr Bernard said.
“It is to a process that has not demonstrated that this is the most efficient, least-cost and fair outcome for consumers and the economy.”

Formal demands to FCCC

FCEF has asked the FCCC to:

• Set aside the December 19 determination
• Publish EFL’s full tariff application
• Commission independent technical and financial reviews
• Conduct at least 60 days of public consultation
• Audit the use of 2018 privatisation proceeds
• Impose a dividend moratorium until renewable targets and prudent gearing are met

The Federation said the outcome would shape Fiji’s electricity regulation for years and urged the FCCC to restore public confidence through transparency and adherence to the law.

FCEF represents employers across all major industries, accounting for more than 150,000 jobs and an estimated $8–10 billion in annual economic output.

The full submission is available at www.fcef.com.fj.