Opposition urges government to reconsider power surcharge

The opposition spokesman on energy, Joe Mizzi, said yesterday that while there was no denying that the international price of oil had gone up, in Malta the energy prices situation was made much worse by the government's inefficiency and mistaken decisions.

Mr Mizzi was speaking in Parliament during a debate on an opposition motion urging the government to reconsider the way it had calculated the surcharge on power and water consumption.

Mr Mizzi said the government's inefficiency could be seen in the way how an energy and power generation masterplan, due to have been published years ago, had still not seen the light of day.

The government itself was also acknowledging inefficiencies which existed at Enemalta.

But the most serious shortcoming was the government's option not to resort to the hedging of oil prices.

The consequences of that decision were highlighted last week in an interview given to The Times Business by Joseph Falzon, a member of the fuel procurement advisory committee, who had worked out a simulation which showed how the corporation would have saved many millions of liri had hedging of oil prices started as far back as 1999.

The opposition had long called for the hedging of oil prices, and the technical argument had now been proved right.

Yet another serious failure was the action, or inaction, of the Malta Resources Authority which had not intervened to protect consumers. And now the minister was inviting a puppet on a string to look into the way the surcharge was calculated.

Mr Mizzi said the government had ignored arguments that the surcharge was unjustifiably high. The consequences of the government's decision were now evident to all the people, but especially senior citizens and individuals who had a low income, with many risking poverty. Businesses were similarly reeling.

The opposition through its motion was calling on the government to hold talks on a new calculation of the surcharge and action to repair the damage caused.

Mr Mizzi said the Labour government had acted to improve the energy production sector, insisting on the introduction of solar energy and solar heaters to reduce the demand for power. New tariffs were proposed as a means to improve Enemalta's financial situation, but a review was ordered before any bills were issued.

The Labour government had also taken steps in view of impending oil price rises and introduced price hedging, but this had been repealed when the PN was returned to power. It was the Nationalist government that had subsequently politicised the hedging issue, Mr Mizzi maintained.

Subsequent events had shown that Labour had been right all along about hedging.

Mr Mizzi criticised the Malta Resources Authority, saying that although it was supposed to be the regulator and as such could have protected industry, small enterprises and consumers, it was Enemalta that had decided on higher prices, completely sidestepping the regulator.

It was not only Labour that was demanding a proper, independent audit of the power surcharge, but organisations such as the Malta Hotels and Restaurants Association and the Chamber of Small and Medium Enterprise - GRTU.

Mr Mizzi said it was right that Enemalta was acting against the theft of electricity, but why had it waited so long?

Malta should have benefited from EU membership to modernise its power generation and distribution sectors, but it was not doing so, Mr Mizzi said. The advent of low-sulphur oil had not really solved environmental problems. Now the country faced the prospect of investing some Lm100 million to come up with a new plan to meet European directives on power generation. Besides making Malta very late, this changing to and fro was very expensive.

Marie Louise Coleiro (MLP) said that if the government was serious it should have set up an ad hoc committee to address the oil crisis transparently and not simply impose a surcharge.

Ms Coleiro said there were families who were suffering to the extent of not having enough money to buy daily groceries.

It was true that Labour had proposed high tariffs, but it had realised its gaffe and Dr Sant had announced corrective measures. Not so the present government.

The MLP spokesman asked how the social services department was involved in the evaluation of how the surcharge was affecting the people, adding that an economic assessment was not sufficient. But for the government, the only concern was to balance the books to the detriment of people's well-being.

Ms Coleiro tabled an electricity bill belonging to a family that had a person with a disability who needed air-conditioning day and night. Like other families, this family was not one of the 13,000 families who were exempt from the surcharge, and was thus suffering the consequences. Between September and December 2005 the bill had gone up by Lm31.69.

Pensioners with an income of more than Lm61.25 (in the case of couples) and Lm51.25 (in the case of singles) were exempt, but not those who had one of their children still living with them and working.

She said she knew of cases of single mothers who were living with their parents, and the families had to pay the surcharge.

People who were eligible for exemption were not being informed about their entitlement, Ms Coleiro said, adding that she doubted that 13,000 account holders were really being exempt the surcharge.

There were also single parents who were living in rented flats and whose meters were registered in the landlords' names. Some had been threatened with eviction if they applied to transfer the meter to their name.

The truth was, she added, that the surcharge was financing exorbitant wages and inefficiencies at Enemalta and the government was not interested in investigating these cases.

The surcharge was also burdening the middle class. Families who worked to buy their own houses and were paying taxes to the last cent had problems to make ends meet.

The government had ruined the country's finances during the past 18 years and it was suddenly trying to patch them up. But it was not fair that it was now placing the burden on families and on industry. The impact on industry was also being felt by workers, most of whom had their jobs on the line.

Clearly, there should be some form of independent unit to examine transparently the source of data used in the government's workings of the surcharge. The government thought that people were imbeciles, but the data was simply not credible, Ms Coleiro added.

The issue of renewable energy had not been taken up properly by the government in 18 years, despite professing itself as an environmental champion. Two budgets ago, the government had said that solar heaters would be subisidised and was now saying that these were not feasible. Ms Coleiro asked why the government was not researching other means of alternative energy. This only showed that the government was short-sighted.