GRTU wins its major claim on electricity tariffs

Since Minister Gatt's first presentation of the revised utility tariffs to MCESD back in October GRTU has consistently put pressure throughout to safeguard the interests of its members and placed a major claim against discrimination.

The major claim of GRTU in its submissions to MRA was that the tariffs structure discriminated against small and medium enterprises. The tariffs carried a different tariff structure, one for selected large enterprises and one for all enterprises with a gross discrimination against smaller businesses.

After several negotiations and a positive response to our claim GRTU was certain that Government would see sense and uphold our request, however, following the intervention of the Chamber of Commerce, Federation of Industry, MHRA and trade unions, GRTU was surprised when the discriminative mechanism against smaller businesses was reinforced.

The new tariffs in fact were introduced with a tougher dose on SMEs than that proposed in October. These unjustified and discriminative tariffs formed the basis of the Legal Notice and this discrimination is today reflected in the electricity bills smaller businesses are receiving.

When MRA requested new submissions for the review of the electricity tariffs GRTU was the only SME representative body that presented concrete and quantified proposals based primarily on the renewal of discrimination against SMEs.

GRTU now expects MRA to assess correctly the movements in the prices of petroleum products including fuel oil, gas fuel and the changes in the new tariff regime that will be effective as from April. GRTU now also expects MRA to propose advantageous terms incorporated in the new tariff structure to compensate for the additional burdens SMEs had to carry under the electricity tariffs effective from 1st October 2008.

The compensation must reflect the loss suffered by SMEs resulting from the imposition of the objectionable 4c3 suffered under the current tariffs, which charge was not directly related to the actual consumption made by SMEs but reflected instead a subsidy that smaller firms were forced to give to cover the consumption of the selected few larger enterprises that benefited from a reduced tariff rate in comparison to smaller businesses.

GRTU today is satisfied that in the new proposals, made by Hon Minister Austin Gatt on behalf of MITC and Enemalta, GRTU's claim to remove the discriminatory element between SMEs and few larger enterprises that benefited from favourable rates has been eliminated. The new proposed tariff structure reduces the tariffs applicable to SMEs by the full amount that was the basis of the complaint of GRTU.

This is only a great victory for GRTU but for all of us who believe that EU Directives beneficial to smaller enterprises should be adhered to. The EU electricity Directive clearly upholds the right of SMEs not to suffer any form of discrimination as a result of in-built cross-subsidisation in electricity tariffs.

GRTU's battle for a more acceptable electricity tariff regime continues. This success effectively means a reduction of around 29% to 21%.