Mr Joseph Gabut, Chairman

TARIFF INCREASE FOR PNG POWER

In July 2021, the Government established the National Energy Authority (NEA) to be the regulator of the electricity supply sector in Papua New Guinea. NEA is committed to working with all stakeholders to create an environment where business and consumer interests are equitably protected.

Chairman Joesph Gabut stated, “The NEA realises that the country requires a resilient electricity sector premised on fairness to all parties involved. NEA is particularly aware of the desperate state of PNG Power Ltd, who have supported the country for the last ten years, without passing on any cost increases to consumers. Since 2013, PNG Power has absorbed all cost increases from fuel and other CPI components whilst kept the same retail tariff for electricity. “

“It is quite clear that PNG Power can no longer survive without passing on its costs to consumers. The company has to cover operations costs that have been rising for the last 10 years, such as those for its staff, suppliers, spare parts, fuel, and power purchased from independent power producers. International events outside our control, such as the Ukraine/Russia war pushing up oil prices and sliding economic conditions means a continuation of multiple blackouts. PNG Power needs to recover.”

Chairman Gabut advised that NEA was informing all consumers that PNG Power will now be adjusting its power cost across all consumer categories by 9 toea — and that all consumers must be aware that the 9 toea increase will apply in all tariff categories effective immediately.
“NEA will continue to support PNG Power in the implementation of its least-cost power development plan. This involves investments in solar and hydro to replace high-cost liquid fuels in the smaller diesel grids, which will over time result in tariff reductions in future years.”
Chairman Gabut noted that PNG Power is undertaking major business recovery initiatives with the support of Kumul Consolidated Holdings, its development partners and their PNG Electrification Partnership programs to improve business performance, increase revenue, improve reliability and reduce fuel costs.
PNG Power will improve its revenue protection through smart metering, meter boxing, and conducting amnesty exercises allowing unregistered customers to be formally registered. These initiatives will eradicate illegal consumers throughout the network.

He noted that concurrently, PNG Power is embarking on a major fuel cost reduction strategy through the development of renewable as mini-hydro schemes and solar PV with battery energy storage systems in all high-cost centers to reduce fuel costs. To improve grid resilience and mitigate many total system blackouts in the nation’s capital, PNG Power will install a Battery Energy Storage System at Moitaka.

Chairman Gabut concluded, “The result of these business recovery and improvement efforts, will be an increase in PNG Power’s cost savings and increase its revenue. This will free up resources to enable capital investment in the infrastructure to improve network reliability and installation of cheaper renewable energy generation, ultimately resulting in lower tariff levels in the country. “

Mr Joseph Gabut, OBE
Board Chairman