FEA braces for El Nino, tariff hike likely

June 19, 2009 12:24:09 PM

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Fiji’s Electricity Authority is looking at increasing tariffs as part of strategies to withstand the impact of the predicted El Nino weather pattern forecast by the weather centre in Nadi.

The authority’s main concern at this stage is its ability to foot its fuel bill.

And FEA chief executive Hasmukh Patel said at a press briefing today that the organisation has plans to go easy on hydro-power and go big on thermal energy.

“What other options do we have because the cost of fuel is very high and as a result of devaluation and world market price rising, we have to somehow maintain our costs,” FEA chief executive Hasmukh Patel said at a press briefing today.

Acting on a forecast by the Nadi Weather centre last week of the likelihood of an El Nino, Patel said that announcement meant less rainfall for the FEA to be able to fully rely on hydro generated power supply.
 
“What is more of a concern to FEA is if that El Nino is to spread through the so-called rainy season, which is after November, then we could be in trouble. So the FEA has adopted a strategy, which is to run a lot of diesel or thermal fuel and reduce our hydro consumption,” he said.

“We hope the water we have available presently will last us from now until December end.”

Patel said 30-35 per cent of Viti Levu’s energy demand was met by hydro power and about 65-70 per cent out of thermal fuel.

He said, for FEA to maximise usage of thermal energy (e.g. supplying 70 per cent of Viti Levu’s electricity demand) “would be very expensive”.

“The price of fuel to FEA as from June 1 is about $1300 per metric tonne, some increase of 30-33 per cent in the last few months,” Patel said.

“The expectation is that the price of fuel will rise even further. We need to burn a lot more fuel in the next five to six months and since the cost of fuel has increased it will be a nightmare for FEA,” he said.

Meanwhile, Patel said the other option to tackle the high cost of fuel was the possibility of re-introducing fuel surcharge.

“That (fuel surcharge) could be an option but I cannot say at this stage that FEA will go back to Commerce Commission and say that it would like to implement fuel surcharge…but that could be an option,” he said.

He declined to comment further on these options saying the board was looking into it “seriously”.

Meanwhile, the water level at the country’s main hydro dam at Monasavu stands at 736 metres above sea level, 15-20 metres above safe operating level and enough to last around four to five months.