The Solomon Islands Chamber of Commerce and Industry (SICCI) is understandably heartened by the news that electricity tariff rates are going to be reduced starting in May 2021.
SICCI, as the peak body representing private sector in the country, welcomes the decision by the Government to revise the current Electricity Tariff Regulations as timely and relevant for the long-term economic recovery ahead.
Board representatives from SICCI met with Chief Executive Officer (CEO) of Solomon Power, Mr. Donald Kiriau to discuss and seek clarification on the reduced tariff rates after it was announced in Parliament.
Minister of Finance and Treasury, Hon Harry Kuma when delivering his 2021 Budget Speech in Parliament announced that based on an independent review all electricity tariff rates have been reduced and will be effective as of 1st May 2021.
These includes Domestic or household customers are likely to see a reduction of 22 percent, Commercial customers are expected to see a decrease of around 27 percent, and Industrial customers are expected to see a fall of 5 percent.
From discussions with the Solomon Power CEO, SICCI understands that the reduction will be made to non-fuel Tariff which is the cost other than fuel to produce and deliver electricity to homes or businesses, including the cost to operate equipment and maintain facilities.
Fuel Tariff (the cost for fuel required to provide each kilowatt-hour (kWh) of electricity) is not subsidised unlike other regions and therefore will still remain.
SICCI also understands that Solomon Power capital work and expansion continues with various projects for rural electrification including the Tina Hydro Project on Guadalcanal, and multiple projects around the provinces supported by our development partners.
Solomon Power is balancing the act of reducing tariffs to customers particularly in Honiara City while also being able to expand our activities to all the provinces.
SICCI has been a strong advocate for a reduction of tariffs which was included in its submissions to Government for the Economic Stimulus Package and more recently in the Private Sector Pathway to COVID-19 Recovery Strategy.
“Reducing the tariffs will also reduce the immediate burden placed on households and would provide immediate relief for businesses at a time when cash-flow is decreasing alarmingly,” SICCI Chairman, Mr. Ricky Fuo’o, said.
“This would mean that business and industry can keep paying workers and negative impacts on people’s livelihoods are minimized,” he added.
SICCI’s continuous call for a reduction was driven by the harsh reality faced by majority of the nation being unable to afford electricity, that has impact on quality of life, economy and living standards for both ordinary citizen and local business owners alike.
SICCI Chief Executive Officer (CEO), Ms. Natalina Hong said: “As a Chamber, we have held consultations with our members, including with the electricity authority about the cost of electricity as one of the biggest challenges especially to a majority of SME’s and the manufacturing sector.
“We believe that immediate electricity reprieve will enable affordable energy costs for businesses which would lead to increase in business productivity,” she said.
On this note, SICCI Chairman on behalf of members extend heartily congratulation to Government and Solomon Power for such a business-friendly decision.
Solomon Islands Chamber of Commerce & Industry
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