Regulator changes review date

The Malta Resources Authority has changed the position it had adopted earlier this month that electricity tariffs should be reviewed by the end of this month.

It yesterday invited stakeholders and the public to come forward with suggestions on the principles that should govern the new tariffs, the consultation period on which will end on March 4.

The electricity tariffs cannot be reviewed before the MRA approves the set of principles on which Enemalta will be basing its calculations. As things stand, therefore, the new tariffs will most likely be announced towards mid-March in line with the government's original declaration that they will be reviewed every six months.

At the beginning of February, in reply to Enemalta's announcement that it was initiating a review of tariffs since its cost base had fluctuated by 15 per cent, the MRA had insisted with the corporation that the review should be complete by the end of this month.

The regulator's declaration yesterday came after Enemalta requested an urgent meeting with it to discuss the principles on which it will be basing its revision of the tariffs. The MRA is now asking for feedback on the set of principles submitted by Enemalta.

Among the principles listed are a "full recovery of all budgeted costs" incurred by Enemalta.

The corporation said such costs would cover the projected impact on the budget of the price of oil in any one financial year, which, as a minimum, would be equivalent to the price paid by Enemalta for fuels used in that year together with the forward price for oils for the other months of the year.

The costs would also include any profits or losses made with respect to both currency and oil hedges occurring in the period.

Enemalta is suggesting that organisational inefficiencies shall not be recoverable from the tariffs and the 2005 report by the Management Efficiency Unit would be used as a basis to determine inefficiencies.

The principles submitted by Enemalta also state that the corporation would use its "latest" audited accounts "for verifying and extrapolating cost data".

Enemalta's latest audited accounts were tabled in Parliament last Monday and they cover the financial year October 2005 to September 2006.

Other principles adopted by the corporation are that it will not expect any subsidy from the government and that consumers should pay for whatever amount of electricity they consume.

A full copy of the principles as submitted by Enemalta, can be downloaded from the MRA's website at www.mra.org.mt or ordered by calling 2295 5153.

Comments for the MRA's consideration are to be sent by e-mail to consultation@mra.org.mt or by post by no later than March 4.

ksansone@timesofmalta.com