Chairman of the Bills and Legislation Committee John Maneniaru has probed the Government’s most recent plan of dealing with the high cost of electricity. Recently the government, through the Energy Division held consultation with various stakeholders regarding the high cost of electricity in the country.
‘The government has engaged a consultant under the World Bank to review the electricity act’ says John Korinihona, Energy Director in the Ministry of Mines and Rural Electrification.
Korinihona told Tavuli News the consultation mostly is to identify areas the country can open up the industry for private investment. He said it is also to properly regulate the tariff settings of electricity in the country. Solomon Islands has the highest cost of electricity in the Pacific.
‘The two major amendments directed by the Cabinet are for the reduction of the tariff. The reduction of the tariff change will take place in section 21 and section 55 to give power to the Minister to change certain tariff after consultations with Solomon Power. At the moment, the Act gives power to Solomon Power to set the tariff and the Minister is just to gazette what has been set by Solomon Power’, Korinihona said in an exclusive interview with Tavuli News.
But Maneniaru said he is unconvinced that such a change would be beneficial to everyone. Rather, he insisted that such an approach might instead come at a high price for Solomon Islanders.
“It is hard to understand how removing the body that has the relevant data, knowledge, and insight of the industry from the tariff setting process will result in a sound and informed decision” Maneniaru said. He adds the danger is that the Minister, in his desire to see electricity prices drop, may be motivated more by political considerations, than economic or technical ones. Consequently, he said this could have long term detrimental effects on electricity costs since it runs the risk of setting a tariff that overlooks the market dynamics and operational costs within the industry. Maneniaru said while legislative change is undeniably needed, the Government must pursue substantial and well thought out solutions to this particular problem. “Our electricity prices are reported to be the highest in the world. Therefore, I sympathize with the Government’s desire to fix this issue. However, electricity at the price of accountability systems, evidence, and data, is no solution at all. This amassing of power in one person is still power at a very high cost,” he said in a statement.
The government has held consultations with the private sector, fuel operators, Solomon Power and other SOE’s in its quest to reduce the cost of electricity in the country.
