Utilility Rate Tariffs: “…because we deserve better”

GRTU this morning, as was promised yesterday by the Director General Vincent Farrugia on Bondi+, published its proposals on Government's Utility Rate Tariffs.

As you are all aware as a member of MCESD GRTU together with the other social partners slammed the proposal and refused to accept Government's consultation method on the issue and the timelines of the implementation of these new tariffs.

This is a story being retold. GRTU never agreed with the surcharge when it was introduced. The surcharge system was constructed by authorities and social partners were once again introduced too late in the game.

This time however GRTU was rightly blamed for the removal of the capping system which benefited only between 78 and 120 companies. The amount that was not paid by the industry due to the capping system was then spread on the rest of the population. This constituted 10% from the 95% surcharge that was being paid by citizens and the rest of the businesses.

This was grossly discriminating and GRTU appealed to the Commission and filed a petition with the Parliament's Petition Committee. This was done with the knowledge that the capping system devised by Government was against EU law and was discriminating in the regards of the businesses GRTU represents and the citizens at large who had to pay  to make up for this. >> P.2

GRTU understands the importance to safeguard the jobs these companies hold. Capping is not the answer in the same way giving absolutely no aid is. The capping system did nothing to encourage industry to move toward energy efficiency. Government has to offer industry an alternative and start auditing their consumption one by one.

For these principles GRTU was in favour of EU membership. The European Union establishes an imposition on Member States to make a timely and transparent consultation procedure. This was absolutely not present   and the consultation procedure being carried out is unrealistic.

GRTU is also pro Europe's competition policy. Malta is unlucky compared to the other Member States as we have a state monopoly supplying water and electricity. To make matters even worse the regulator is absent. The regulator is there to protect the citizens and his functions are fundamental to avoid abuse. GRTU wanted to see tariffs issued by the regulator and placed on their website  for proper public consultation. The accountants should have been appointed by the regulator.

Inefficiencies in Enemalta should have diminished but instead they went up by 35%, this was confirmed by the KPMG. We are paying higher rates not only due to international affairs but also due to the management inefficiencies in Enemalta.

GRTU cannot agree with the tariff system being proposed as we believe it should not be based on a specific period-last September as KPMG suggested but on a secular basis.

In addition GRTU demands a choice of tariffs for consumers. There should be at least 3 choices- one for peak, an intermediary and another for the night hours. 

We ask how can Government come up with tariffs without knowing what is being consumed. GRTU at the end of 2007 had applied for structural funds with a proposal to evaluate the energy consumption in Valletta of each household and establishment. Through energy audits a strategy would have been constructed to diminish the consumption as well as the bills. This project was unfortunately killed by bureaucracy.

The amount that Government wants to collect includes running expenses, investment and return. Economically speaking this is correct but the collection has to be done on a longer term. Malta has no energy efficiency plan and Enemalta must start planning on a long term. The recovery planned must however be diminished and no company recovers such an investment within the same year.

GRTU asks government to halt this proposal on utility tariffs. This until a proper discussion is held, it is high time that a debate is held and the public wants it.

GRTU has several other proposals including electronic billing with discount factors, real rebates up to 70%, energy audits, energy efficiency campaigns, rental fee on the water meter to be removed and a reasonable amount of time for the MCESD partners to send their proposals.

The full proposals are available on GRTU's website: www.grtu.org.mt. Meanwhile we encourage our member's comments on the issue.